I grew up in a pretty bad part of New York City.
I am talking about gangs, drug dealing and gunshots in the night type of bad.
When you live in an area like that, being poor is a given. During that time (and even into early adulthood) I constantly struggled with money. In fact, my net worth was negative well into my twenties. It sucked, but I did notice some very clear patterns that almost all poor people experienced.
In this article, I am going to discuss 13 signs that you are poor (and some ways to fix them). After all, this is a personal finance and business blog – I wouldn’t be doing my job if I didn’t cover ways to improve your financial situation. But it won’t be preachy or tedious, I promise. We’ll only cover simple, practical, and super-effective ways to get more money into your pocket with out a lot of fuss.
Let’s get into it!
Note: If you prefer to see a condensed version of this article in video format, check out my YouTube video below.
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The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
You Don’t Fill Up Your Gas Tank
This is a classic sign that you are poor.
When you’re poor, you just don’t have enough money in your account to fill up the tank all of the time. This is a completely foreign concept to the rich (or even middle class). They have never had to wrestle with the impossible decision of buying gas or buying groceries.
If you’ve ever gone to the pump and just put in five dollars worth of gas to (hopefully) get you through the next day or two, then you know what I am talking about. And on the rare occasions when you do have the money to fill up, you feel a big worry has been lifted from you (at least for a good while).
While not filling up your gas tank each time is inconvenient and ultimately more expense in the long run, it’s not a huge problem in and of itself. But it is a symptom of a bigger issue. Simply put, your income is not enough to cover your expenses.
How do you remedy this?
The answer is simple, but not easy. Make more money. You can of course, try to work more hours at your job if that is an option. You can also try to take on a second job.
Personally, I like the idea of freelancing. With the emergence of the gig economy, there are lots of great options that don’t require any prior experience or special degrees or licenses.
If you are interested in learning more, check out my article on the easiest freelance jobs for beginners.
You Dream About Winning the Lottery
It’s a pretty well-known fact that poor people play the lottery far more than rich people. Source.
The reasons are obvious – if you’re rich, you’ve already kind of won the lottery. You don’t need the money or lifestyle that winning a huge jackpot can provide.
But if you are stuck in poverty, the lottery seems like the only way out. They sell you the dream and people eat it up. I used to play the lottery religiously each week. I also used to gamble at casinos too, but that’s a tale for another time. I did all of this not because I really thought I would win (I knew the odds were awful), but because I hated my life. I wanted at least a chance (no matter how slim) that my life could change miraculously in an instant. It’s a compelling dream, but it’s a false one.
Of course, you know that all of the money that you spend on lottery tickets can instead be used to build a better future for you, right?
The way I look at it, you need to substitute that addiction to playing the lotto with a better addiction. The first step is taking that same money that you use to play the lottery and put it into a savings account. In fact, there are some really cool savings accounts that have a lottery feature!
If you are interested in learning more, check out Yotta.com.
Not only do they pay more than double the national savings rate, they offer you a chance to win big jackpots by giving you tickets when you make qualifying deposits into their savings account. The more you save, the more chances you get to win.
This type of savings account scratches the lottery itch, but you are not out the cost of the lottery tickets. You still have every single penny you put into the savings account (plus a little more). And before long, you are going to see that balance increase and turn into real money.
If you keep at it (and don’t withdraw it), that seed of money can become the start of real and lasting financial success for you.
An Extra Twenty Bucks Means a Lot
When every dollar matters, twenty bucks is a big deal.
So much can be done with that $20, after all. It can mean eating a decent meal out without regret. It can mean buying milk, bread, eggs and other essentials. You could use it to help pay the electric bill or fill up your car with gas (as we already discussed).
When you’re poor, twenty dollars matters.
But contrast that with the rich or middle class. For them, while it’s nice to get an extra $20, it’s not really going to influence their life in any way. It’s just a mild benefit and a “nice to have.”
You Can’t Survive Without Government Aid
If you get social security (disability or otherwise), food stamps, housing assistance, utilities assistance, or any of the other government sponsored aid programs, then you know how important getting that assistance is for making ends meet.
If you can’t imagine surviving without that type of aid, that’s a pretty good indicator that you are poor. Not only will rich and middle class people not qualify for that type of government assistance, they do just fine without it.
Now I don’t begrudge those who get government assistance – I used to get free lunch when I was in school. It allowed me to eat and I am forever grateful that I live in a country that takes care of its people. Now, as an adult, I pay my taxes and am happy that I can help others who may need aid, just like I did when I was a kid.
But I have been on both ends of the spectrum and believe me, it is better to be making money and paying taxes than receiving government benefits. You don’t know when those government benefits will be reduced or taken away. In short, you just aren’t in control of your destiny.
But it doesn’t have to be that way. If you start to learn about personal finance and take baby steps to change your financial situation, you can get to a far better place in just a few short years.
If you want to learn how to get started, check out my article on the five pillars of personal finance, where I go step by step into how you can stabilize and improve your financial life.
Each Payday is a Cause For Celebration
I get it – payday is a big deal.
You go from having nothing to having real money. It’s worth celebrating. But it means a whole lot more to poor people than it does to rich people. For the rich, it happens like clockwork and is really just part of the process for paying their bills each month. It’s not usually accompanied by any excitement, nor do they view it as a reason to celebrate.
Poor people, however, do get excited when payday rolls around. They buy a nice meal, go out and party, or splurge on other things that they enjoy. It’s a big difference in mentality and a very good indicator of whether you are rich or poor.
You Are Living Paycheck to Paycheck
I was a bit torn on whether to include this because there are plenty of people who are not poor who are also living paycheck to paycheck. But, in the end, I thought that a lot of poor people are living this way and it was a pretty good sign that you are struggling financially.
Poor people live paycheck to paycheck for a variety of reasons, but the most likely ones are that (i) they don’t make enough; or (ii) they don’t budget well enough. We already covered some practical ways you can increase your income (i.e., freelancing, etc.). But if you want some more great ways to make extra (and passive) income with no money required, check out my article on the topic here.
On the other hand, if your issue is that you can’t seem to get your budget right, you are not alone. It is a very common problem. To learn more about why budgets fail, check out my article on the ten biggest reasons why budgets fails (and how to fix them).
Holidays and Birthdays Stress You Out
Birthdays and holidays were always a great time for me growing up, but I know they were stressful for my parents because money was so tight. Gifts can be expensive and, unless you have budgeted for them (almost no one does), they are going to throw your finances for a loop.
When you are poor and don’t have the flexibility to handle those types of one-off expenses, birthdays and holidays can be a really stressful time, rather than a joyous one.
You Are Late Paying Your Bills
When you are poor, paying your bills late (and taking the bad hit to your credit score) is common. This is because you just don’t have enough to cover all of your expenses. You may have to make the choice between paying your rent and paying your credit card bills.
In most cases, your credit card bills and other less essential bills are going to take a back seat. You promise to yourself that you’ll pay it when you can, but that day never really comes. The stack of late bills piles up and you enter into a vicious cycle of debt and collections.
Many poor people have faced this situation (or are still facing it). If you have a pattern of paying your bills late, chances are you are among the poor who struggle to make ends meet.
Fortunately, with the emergence of technology, there are some cool tools to help you stay on top of your bills. First, you can use apps to help with this. Mint is a leader in this space. They have a slick app that connects to all your financial accounts and keeps track of your spending.
They also track your bills and give you alerts so can you pay them on time. Finally, they have a budgeting application that helps you create a realistic budget based on your spending habits. You can then use their “daily budget tracker” to see how your current spending affects how much money you will have at the end of the month.
It’s a great way to know exactly where you stand in relation to your budget at any point in time.
If your problem is simply that your monthly debts are just too large, one option you may want to explore is permanently lowering some of your bills.
LowerMyBills.com is a premier, free, online service for consumers to compare low rates on monthly bills and reduce the cost of living. If you are interested in learning more, check them out here.
Your Kids Know Better Than to Ask You to Buy Them Anything
I am sure a lot of you can relate to this.
Kids are impulsive. It’s just the way they are. If they want something, they are not going to hide their desires from you – they will let you know. That means that, left to their own devices, you will be getting a lot of requests to buy candy or toys at the market (or the latest trendy thing that all the other kids at school have).
But kids are also smart and they learn fast. After getting repeatedly denied, they figure out that asking is pointless and the requests die down. If your kids have reached that state, it’s a pretty good sign that you are poor.
You Use Everything Up to (and Sometimes Past) It’s Useful Life
“Use it Up, Wear It Out, Make it Do or Do Without”
If this motto resonates with you, then you are either extremely frugal or you are financially struggling.
Whether its patching up clothes that have holes, fixing your own broken items throughout the house, or repurposing things so they last longer, the art of using things till they literally break down is a reliable sign that you may be poor.
You Are Not Future Oriented
This is one of the key indicators of being poor. When you are living hand to mouth, who has time or energy to be thinking about the future? You need to take care of immediate needs.
Unfortunately, it’s also the reason why I think poor people have a hard time breaking out of the poverty cycle. When you have a little breathing room, you can plan for the future, make better decisions, and ultimately make headway. But if you are trapped in really bad poverty, it’s all you can do to stay afloat.
This is why I find it amazing when people who are truly destitute make it out.
I was never that poor, but even in the situation I was in, I remember how hard it was to break the cycle. I was constantly putting out fires (financially) and you start to lose hope after a while. You think what’s the point? Might as well enjoy myself a little when I can. And that leads to a never-ending cycle of poverty because you never save, you never accumulate wealth and you never reach a better financial place.
You Don’t Go To the Doctor
Going to the doctor when sick is a luxury that poor people can’t afford.
So if you have found yourself deciding not to go to a doctor when you are sick because you don’t want to pay the bill, you are probably among the many poor people who have made a similar choice. Unfortunately, this can seriously impact your health and wind up costing you more money in the long run.
You may want to check out this article on how you can still get medical treatment even when you don’t have money.
You Value Money More Than Time
This is a classic sign that you may be poor.
Rich people value their time more than money. That’s why they hire people to mow their lawns, pull their weeds, clean their gutters, fix their toilets and a host of other things that they could do if they wanted to learn or had the desire to do.
They have money in ample supply and value the limited amount of time they have each day. They don’t want to waste it doing mundane chores that they can outsource to someone else.
But when money is in short supply, you are willing to put in time instead to get the job done. You may wait at a bus stop and take an hour or two to get to work because you can’t afford to buy a car. You may shovel your own walkway when it snows because you don’t want to “waste” your money hiring someone else to do it.
It’s a classic difference in mindset and it is purely driven by disparities in wealth.
So there you have it 13 signs that you are poor and some great tips on how to fix them.
If you want some more great ideas on how to make money with a lot of effort or cost, check out my article on low cost passive income ideas (all for less than $500).