10 ways to become poor

Oftentimes, one of the best ways to learn something is to study the opposite. In this case, let's just take a look at 10 ideas that will take you backwards financially in order to get a clear picture of what not to do.Oftentimes, one of the best ways to learn something is to study the opposite.

In this case, let’s just take a look at 10 ideas that will take you backwards financially in order to get a clear picture of what not to do.

1. Spend more than you make

Actually if you only do #1, you won’t have to worry about the other 9. This is the easiest way for anyone to become poor. It doesn’t matter if you make millions or hundreds each month, the same principle applies.

2. Lust after what you don’t have

Desiring something better is not a bad thing, but lusting after it is. Buying things you can’t afford, because you are not content to wait until you can afford it is a great way to stay poor.

3. Never give to anyone

It seems counter-intuitive, but keeping everything to yourself only causes you to have less. Proverbs 11:25 says “The generous man will be prosperous, And he who waters will himself be watered.”

4. Don’t pay attention to where your money goes

From talking to people about budgeting, I find that most of them say that when they started budgeting it seemed like they had a whole lot more money. The reason being that they didn’t know where it was all going before they were budgeting. I had a similar experience myself. I said, and really believed, I knew where my money was going, but once I started a budget, I was amazed at how much more money was available.

5. Get a loan for everything… cars, a new bedroom set, a vacation ***BONUS: use credit cards with a 25% interest rate!

Using cash to buy things (especially items that depreciate in value) is the key to breaking out of the “poor” cycle. Ever notice what part of town you typically find the rent-a-centers? It isn’t where the wealthy people live. As Kiyosaki said in his famous book, Rich Dad, Poor Dad, the poor (and middle class) buy their luxuries immediately and on credit. The wealthy wait, save up and buy it with cash.

6. Wait for the perfect time to start saving

As with most positive life changes we can make, there never seems to be a perfect time. Now is always better than later.

7. Follow the crowd

The older I get, the more I realize that the crowd is often wrong. The crowd is also mediocre. I often have to remind myself the reason I am driving an old (paid off) car, while some of my friends are driving brand new (borrowed) cars is because I am patiently waiting for the reward of avoiding debt. As Dave Ramsey says, “you have to live like no one else today, so you can live like no one else tomorrow.”

8. Don’t worry about the little things, they don’t really add up

God seems to be into the little things. I think that is why the Bible says He uses the simple things to confound the wise. Everyone looks to the big things and the flash-in-the-pan, but it seems to be the little things that make the biggest changes. I don’t think it is any different in our financial lives. I mean how else could a family making $35,000 each year retire with millions and a $10 million lottery winner end up bankrupt?

9. Invest your money in things that you know nothing about

We should know where our money is going and why it is going there. Don’t just buy a stock because you got a “hot tip”. Buy a stock in a company that you understand how they make money, who their customers are, and if there is evidence suggesting that the business will continue to thrive.

I have invested in things I absolutely didn’t understand and I will just say it is a bad idea all the way around. It is always a better idea to hold your cash in a money market account until you understand the investment. Then, once you understand, pull the trigger.

10. Waste stuff – money, food, time.

I remember hearing that “someone who is wasteful, is not really thankful.” I am not sure if that is always the case, but as stewards we have a responsibility to minimize our wastefulness. Jesus even had the disciples pick up the scraps after He miraculously fed 5000 so that none was wasted (John 6:12).

Do you have any to add to the list?

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  1. Nicki at Domestic Cents

    Wow, great list. I agree with all of those. I’ve done most of them and paid sorely. I’m on my way out of it now and wish I could’ve learned lessons the easy way 🙂

  2. Sarah

    “Don’t talk about your finances with your spouse”…..

    This one isn’t as extreme as the others, but I think it makes a huge difference in your spending habits, etc. when you are kept accountable by someone else–especially your life partner!

    Great post. All so true…..now just to implement it all in my life!!!

    • Kathy

      This is a great one. Since retirement, my husband and I sit down to do our budget and bills together, twice a month. We have less spontaneous spending, and we each know what we have to live on that month. This avoids hard feelings if one wants to splurge on a little something because we both know whether we can afford it or not ! We make it an enjoyable time to look forward to. We go to a local restaurant and pay bills, budget over coffee and a biscuit. Of course, the physical bill pay that is done via internet is done at home where there is a secure connection ! Another one is DO NOT ASK THE LORD HOW HE WOULD HAVE YOU SPEND YOUR MONEY. Each bill pay session, we begin with Prayer, being thankful for what He has given us and asking guidance .

    • Teresa Nelson

      This is just as important as all the others. My husband and I follow this rule all the time EXCEPT last year when my brother put his Suburban up for sale and offered it to us a little cheaper. We went through with it without discussing it thinking the other one wanted it when in fact neither of us wanted it! Now we are stuck with a loan and we can’t seem to sell it. All of this to say- don’t assume you know what your spouse wants!

  3. savvy

    Great list. I would also add – buy the biggest/best/latest everything.

  4. Carolyn

    This kind of goes along with numbers 4, 8 and 10, but another one to add is: “Don’t pay your bills on time.” That way you can pay late fees and higher finance fees and it will take even longer to get out of debt.

    I loved this post. Thanks.


  5. bob

    yea, did I mention that I too learned most of these the “hard way” 😉 But, I guess it is better to learn late than never 😉

    • Elaine

      Wow I am experiencing a lot of this right now.
      But found a Christian Credit Counseling program that is helping me
      All for instant gratification
      I quests all is not loss as long as you learn from your mistakes

  6. Craig Kessler

    No shocker spending more than you make is number one. Sad thing is even though it’s so obvious, it’s still true. the others are more avoidable, or in some way fall into this one category. All debt buildup comes from spending more than you make.

  7. Jason

    Good, solid top 10 list!

    Another way to become poor? How about being a financial enabler to a spouse or child (co-signing loans, giving excessive money to them, etc.).

  8. Travis @ CMM

    I blogged Monday about How to lose your office job. I gave step by step instructions on how to get fired. It seems like it would be a great addition to your list. It was all done in fun of course. With all the negativity right now we could all use a laugh.

  9. Candy

    Wow, A lot of want to stay broke. Thanks for the post!

  10. Chris

    Thanks for the points, would have to agree with them all. The whole world’s economy seems to have become one giant ponzi scheme, all that it happening now is that everything is adjusting back to what it is really worth. I remember growing up in the 60s and 70s, we never went hungry, had a comfortable home, but never the luxuries that we have all come to expect today. So how how have we suddenly been able to afford the luxury lifestyle, it seems only by borrowed money that has to now be repaid. Maybe we will start to learn that we invest what we have saved, not invest borrowed money to create leverage and in the process inflate the share and housing market and cause eventually a financial crash. Some get in and out of the markets quick enough to make some money, but eventually someone has to pay the inflated price, which they sadly eventually realise is over valued, because they can’t pass the debt onto some other sucker. I bought my house for $45,000 21 years ago, why should it have a “value” of $350,000 today, my wages have only gone up 4 fold in 21 years, but the house has done about an 8 fold increase! Thats why housing prices will have to continue to fall. But this has happened in Australia, I’m sure it is different elsewhere!

    • Qrius

      One thing about homes is that you’re not really paying for the home. You’re paying for the location. And more specifically, about desirable location.

      At that point, it comes down to supply and demand, basic economics.

      So if you have a home in a desirable location, where population continues to grow, then the home price will go up. But if you are buying in a location where it’s not yet determined if population will increase, then yeah, dubious investment.

      I’m not promoting buying a home you can’t afford, but just saying not all homes are overvalues. It comes down to supply and demand.

  11. Chris

    #3. Never give to everyone.

    I agree with the rest of the list but this one is wrong. Some folks give 10% charitably every year. That leaves a hole that takes a very very good investor to overcome.

    • bob

      Proverbs 11:24
      “There is one who scatters, and increases yet more. There is one who withholds more than is appropriate, but gains poverty.” (WEB)

    • Dan

      No one who lives on 100% of their income, could not just as easily live on 90% of their income.

  12. Marie

    Having friends whose idea of fun is always spending money on something to do.
    I’ve had to “train” my friends to find places for lunch that were $10 & under so that people who didn’t make so much money could hang out with us (including myself). We would then go to a museum afterwards that was by donation, or for a nice walk in the park.

  13. Cale McCardell

    Hi. I am writing an essay , commenting on the question, “Am I responsible for helping those less fortunate?” I must chose a side, yes or no, so I would have to chose no. My only problem is defining why I chose so, and that I am right.
    This topic covers how to become poor, but not how to become un-poor. What if u are already poor? How could you give if you have nothing? Give time, oneself? In America, you could go to donation centers and receive help, I’ve seen a bum become famous for street-side advertizing. Does this mean that I am not responsible, because he could make it from the woods and into a home? And if he is crippled, physically or mentally, would one be able to work? My mom said of the homeless American Veterans, (Veterans make up 30% of the homeless in America), you could give them a home and they would leave it. Id have to reason that on a macrosopic scale i cannot feasibly help. Niether can my country or Bill Gates. However on a microscopic scale i can help those on my path, and not worry if they throw it away or use it to become greater. Jesus said that there will always be poor among us. And ultimatly God is responsible for those who are poor.

  14. Arlin Penner

    This (your view in this article) may be from a developed country basis. But thinking from a worldwide perspective or from my experience in the Congo DR, I could lose all my money but I could never be poor! Being poor in most countries comes from a lack of access to clean water, adequate food, even health clinics, and little or no chance for education, as there <10% can enter high school. Thus there is roughly 75 % unemployment. It is one of the places in the world where the economics are lower than Haiti.
    While your list certainly includes mistakes made by many people, I believe another might include the lack of knowledge of how much we have access to and simply not participating in the banquet of opportunity available to us.

  15. Simon Wells

    There are some entrepreneurs who are reported to be worth millions and millions, but when you investigate a few of them here and there you usually find that all their wealth is only tied up in their businesses and nothing else, and practically every business venture they have undertook was built just on bank loans. How much of that wealth is really theirs ?
    Then if their trusted bank was to all of a sudden stop lending when their businesses were heading downwards, how many of them would survive?
    I know i may sound sinicle but when you see the truth and you get a glimpse of the real picture behind the superficiality, then what else in their lives is a lie?
    You get some who drive around in Ferrari’s then find out that the car was rented, Nothing is usually truly what it seems with some people.

  16. Beth

    Not learning how to ‘say NO’ (politely and in a kind way of course). It is ‘hard’ when some people you may associate with, just cannot take no for an answer, or perhaps you (like me) told little white lies to ‘get around’ not spending money because things were getting out of hand! i know, I’ve been there. ‘That’ person that wants a once a year dinner catch up, that then, turns into twice a year, then three times a year, THEN every month, THEN twice a month! it was crazy….the dinners out were always over $100 (Australian), ”add the tip’ and of course the restaurant would not split the bill so we ‘had to’ throw in, in the end (too bad if you had an entree only and drank one soft drink)…it was very unfair and our bank account was looking worse for wear. Things ‘had to change’ so after trimming here and there including the dining out twice a month, eventually i did confront and explain and I’ve not heard from them since (that was over 4 months ago). This couple is ‘quite wealthy’…..many properties, overseas travel and nice cars kind of wealthy – so, i spoke the truth in love 🙂 and said we just could not afford that kind of expenditure – Sometimes we don’t want to offend or risk losing friendships so we ‘go along with’ and please people instead of listening to wisdom 😉 – but oh the Peace that comes if one chooses the latter…so courage to say what your boundaries are is also crucial to helping avoid poverty.

    • Lauren (SeedTime Editor)

      Great point, Beth. Good for you for doing what you needed to do for your situation!

  17. David Dwyer

    Add ‘Trust a financial adviser”.

  18. Batanai

    As an African, I have learnt to NEVER rely on handouts if you dont want to be poor. Relying on handouts will cultivate a dependency syndrome which will lead to extreme poverty and manipulation. I have learn to earn my share and build wealth, same as well up people are earning theirs and building theirs. Like Beth said, you cant afford to please people instead of listening to wisdom.

    • Lauren (SeedTime Editor)

      Thanks for the comment, Batanai! Great insight.

  19. Maggie

    All points hold very true. #8 resonated with some advice I was given from a wealthy, dear friend after I had spent $3 or so on a “online convenience fee” for a show ticket, when I could have simply arrived to the venue early, purchased the ticket, and saved myself the $3. When he questioned why I would waste the $3, I brushed it off with the old “oh, it’s only 3 bucks”. He quickly replied with something that would stick with me: “What you do with 3 disposable dollars is a direct representation of what you would do with $300 in disposable funds…you waste it. It’s a matter of principle, Maggie. Learn to steward your money”.

    Maybe $3 was “small potatoes” that day…but it certainly turned out to be “big picture”.