Are you poor? Do you want to stop being poor or stay poor? The first step to getting out of poverty is to realize why you’re poor. Here are a few reasons why you may be broke. Once you know why you’re poor, you can take action in getting out of your situation.
1. You don’t have an emergency fund… Ideally, an emergency fund has three months worth of expenses: Rent, food, utilities, gas or MetroCard, etc.
2. … Or even a spare $400. Many Americans, especially in younger generations, can’t afford a $400 emergency. What will you do when you have an emergency car repair or medical bill?
3. You’re ignoring your student loans… If you want to be an irresponsible freeloader, sure, stop paying private student loans if you’re cool with having sh*tty credit for seven years. However, do remember that federal student loans don’t just go away if you don’t pay them off—and the government can and will garnish your wages.
4. … Or not paying them properly. Make sure your loan payments are going towards your principal, not just your interest, or your kids will be paying for your Pottery 101 class when you’re dead. Similarly, if your wages are garnished, that goes only towards interest, not principal, so just be f*cking responsible.
5. You’re not living beneath your means. Living within your means seems good, right? The problem is, when you have an accident, get sick, or get laid off, if you don’t have a bit of a buffer, you’ll run out of money a lot faster than if you lived beneath your means and had money left over.
6. You’re thinking with your vagina. Be sure you know what you’re getting into before you get married and file taxes jointly with someone else. They may have a ton of debt that you may get stuck with if you haven’t done your due diligence before tying the knot.
7. You don’t know how to save. Have money automatically be transferred into a savings account every week or month. You won’t miss it if you don’t know it’s there.
8. You’re investing in the wrong things. Depreciating assets like cars and jewelry won’t get you ahead. Instead of diamonds, get a certification or take a course. It’ll help you make more money later.
9. You’re spending too much on rent. Don’t be a snob about your zip code. A 20-minute longer commute can mean an extra $500 in your bank account every month.
10. You’re in denial. Not opening your bills or facing reality won’t change your life. Take control.