Updated on 07.31.08

Some Thoughts on Being Broke and Being Poor

Trent Hamm

A few days ago, I wrote a post where I responded to a reader who felt I had nothing to offer her because my income was significantly higher than hers. I strongly disagreed – I feel very much that the principles of personal finance apply to everyone. I used the example of sharing money-saving tips with my parents, who earn significantly less than I do – we both benefit from a lot of these activities. Similarly, my father is an entrepreneur who has a thriving fishing and gardening side business – he doesn’t have a big bankroll, but he has passion. I learned entrepreneurship from him and it led me to have the courage to start The Simple Dollar and run with it.

Underneath that, though, Marjorie did have another interesting point worth discussing. There are simply some people in very difficult financial situations that I can’t help. If you are in a position where your earning potential is low and you have to work every spare minute to make ends meet, the idea of shaving a few dollars from your budget to help keep yourself above water is laughable. Most people in low-income situations already follow most of the frugality tactics I mention, not because it’s a good way to help get themselves in better financial shape, but out of pure necessity.

You're Broke Because You Want To BeLarry Winget, in his very solid personal finance book You’re Broke Because You Want to Be, hit the issue right on the head. He made a distinction between the idea of being poor and the idea of being broke in a very clear way. Here’s what he had to say:

Please don’t say, “But what about the poor people, Larry? They don’t want to be broke.”

Great point. You’re right. I’m not talking about being poor.

Poor is a condition I find very sad. Sad, yet inevitable. Jesus said, “The poor will be with you always.” And they will. There are people who live in soicieties and countries where there are no opportunities for advancement and it takes all their effort just to survieve. They are not going to have enough to eat well or live well or take care of themselves.

So let’s get this straight from the outset so you can get off your high horse and understand what I am really saying. I didn’t write this book for the poor people of the world. I know it is going to take a lot more than a book to help truly poor people. To think otherwise would be insulting.

I am talking about broke. Broke is not a condition like being poor. Broke is a situation you find yourself in because you are either underearning or overspending.

In short, being poor means that you don’t have the resources available to you to improve your financial situation. For some, this may mean a personal challenge, such as a learning disability or physical disability. For others, it may be a confluence of events in life that close doors to progress, such as having children before you’re adequately prepared. I know some people in these situations and I know that there are many more in this group throughout the world. It will take some significant social progress to reach these people

Poverty is not something I can help. It’s something far beyond the ability of an internet blog to help. It requires significant social change and a very large commitment to lift all of the boats in the world. If I want to actually help with poverty, I can go over to the food pantry and help gather for them, I can donate some of my financial gains to charities that help with poverty issues, or I can get involved in political causes. No list of “tips” I can write can help with genuine poverty.

On the other hand, being broke means that you do have resources available to you to help improve your financial situation, whether you see them or not. This is usually due to a lack of personal finance education, poor time management skills, a lack of willpower, and so on. What I’ve found is that almost everyone who can access The Simple Dollar falls into this category – they have some resources somewhere that they’re not utilizing well, and by utilizing them better, they can achieve their dreams.

Being broke is something I can help. I can offer up my own experiences in a very detailed fashion. I can suggest fixes that work in a wide variety of lifestyles. I can offer all kinds of insights on how to better manage your time and how to use that excess time to increase your income.

If you’re reading this, you’re probably in the “broke” boat, were in the recent past, or desperately want to avoid ever going there. Welcome aboard. Let’s sail beyond the sunset together.

Yes, some people can fall into both camps. They are in a situation without many resources to spare and because they’ve been led to believe they can’t succeed, they don’t believe in those resources and don’t believe in themselves. I know some people in just this situation – they believe they’re in the “poor” camp when they’re actually in the “broke” camp. I would rather reach these people more than anyone else, and that’s why Marjorie’s email struck such a chord with me, because I believe she’s in this group.

The fact that some people have resources and some people do not is a very broad societal issue, one I can’t hope to solve. All I can do is try to reach out to the people who have resources available to them and help them to discover how to really use those resources. I don’t profess to have any kind of solution for any greater societal problem, but I do find a lot of value in helping people find ways to succeed themselves.

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  1. Mister E says:

    Fair enough.

    If you’re a young couple working as a dishwasher and a retail clerk with a kid or two there really isn’t much in the way of helpful tips to be offered.

  2. "Mo" Money says:

    Somehow those who are poor must be able to help themselves by improving their skills or by education to get out of their condition. I don’t think the government can do it by giving them money, it must be a program that will build them up while helping them with their skills.

  3. Lisa says:

    One of the reasons I enjoy this blog is because of the heartfelt thoughtfulness that is obvious in each posting. You make sense, and have a heart for the poor. It is terrifying to think about being broke, but it is fixable. You are right, it is extremely difficult to move beyond being poor without help. I think that our obligation, then, is to manage our resources well enough so that we can help our both ourselves and those who cannot help themselves.

  4. April says:

    Agree with Mo Money, which is why I’m a fan of microfinance charities that help the poor in wartorn countries to gain skills for employment or to start their own businesses.

  5. writer dad says:

    Absolutely right. There are a lot of people in this country that are sweating it because their houses are filled with too many things that they do not need that they purchased on impulse.

  6. Movingonup! says:

    A well thought out article! Thanks again.

  7. Shanel Yang says:

    Excellent distinction! Now I know what to say to folks who have shown contempt at my having paid off $50K in one year b/c I used to make enough money to get into that kind of debt in the first place. That post is at http://shanelyang.com/2008/04/23/how-i-paid-off-50000-of-debt-in-one-year/

    We all have our struggles, our wins, and our losses. : )

  8. Saagar says:

    Geez, looks like Majorie has sure struck a chord or too Trent.. I like your other posts but this one seems to be a bit offensive, but again, it depends on how the material is sunk in. I took it in a positive note, but not every one might…

  9. peachblush says:

    Excellent point. The “broke” people are the same one who call me “lucky” event though I’ve worked very hard for everything I have. The choices we make have far reaching consequences.

  10. Becky says:

    Thanks Trent, for this thoughtful article.

    I have seen so much anger and hateful language directed lately at the poor (both here and abroad) by Americans. High-horse lectures about “personal responsibility” and “if people can’t afford children they shouldn’t have them” (as if people born poor do not deserve family, love, and human connection) and “I work two jobs to support my family and have never accepted a dime of charity, therefore poor people are lazy and need a kick in the pants. Maybe if they suffer enough they’ll shape up.”

    I have been wondering where this comes from and why, with only 1% of the U.S. Federal budget and 2% of state budgets spent on government programs for the poor (most “entitlement” programs are for the middle class, like Social Security and Medicare), and less than 1% on foreign aid of all types, so many Americans feel that the poor are a big burden to them personally.

    Sometimes I think a lot of Americans believe that if society would just be derisory enough, the poor will magically manage to be not-poor anymore. Or maybe the hope is that they’ll go somewhere and just die and quit making the rest of us feel bad? I swear, sometimes it feels that way.

    I don’t know. I don’t have any answers. But I am go glad that you are thoughful enough not to believe poverty is an easy problem to solve.

  11. Jim says:

    I still don’t understand your reader’s objection to your income level. When I’m looking for financial advice, I’m LOOKING for someone who’s got more money than I do. That’s a sign that they know what they’re talking about.

    What should I do, ask a poor person for financial advice? What kind of sense does that make?

  12. Liz says:

    Thank you for acknowledging the difference. I was a bit unsatisfied with your original post (although I agreed with most of it) because I felt that it didn’t fairly acknowledge the realities of poverty that are worth distinguishing from the money problems of the middle class.

    By simply distinguishing between broke and poor, I think you acknowledge that different classes face different chalelnges.

    My only disagreement is this: I would say though that you CAN help those people too. My co-worker and I teach financial literacy to college students and we recently branched out to teaching the same principles to a job-skills program for people on TANF.

    We had to do a lot of rethinking to learn how to tailor our presentations because our entire focus came from a middle class perspective to a middle class audience. I.e., How can we talk about curbing your spending and living beyond your means when these people are using their very last dollar for formula and diapers?

    But just because our audience changed, didn’t mean that our perspectives had changed. So we told our audience that we were also there to learn from them. We found that acknowledging that and being open to letting our audience share with us their challenges allowed us to create a successful program that got this information to them in a way that was truly useful for them.

    It can be done. But it requires that we are open to people who say that traditional financial wisdom may not apply to them because of extra challenges that they face. Because we know the economic system, we’re able to get creative about helping them overcome those challenges in unique ways.

    By the by, my co-worker and I have not only been asked back to speak at the job-skills program, but the organizer shared our contact information with all other similar programs in the state.

  13. Matt says:

    Great job drawing that distinction Trent. Getting out of “being broke” is actually somewhat easy if you have the means, humility and the resolve to simply spend less than you earn and make smart decisions. Being born into and getting out of true poverty isn’t even the same ball game. Keep up the good work.

  14. steve says:

    “Marjorie”‘s letter, to me, indicated a frustration with a situation where she has to do all the “frugal” stuff just to get by, not to get ahead.

    Most of Trent’s readers have enough income that when they do “frugal” things is shows up as extra money to save, invest, or pay off debt.

    I have the feeling Marjorie isn’t in that camp, and that she was writing from a point of frustration.

    that’s all. And we don’t need to fixate on whether she SHOULD feel that way, or whether she SHOULD do or believe this or that. She’s a free agent. The best thing to do is to put the focus back on your own goals and life, and off of “Marjorie”‘s. If she’s still reading, I think she should know that there are some of us who understand where she is coming from, empathize with her and wish her well.

  15. Todd says:

    Great post, Trent. You examined the distinction logically and compassionately, and more succinctly than I’ve ever seen it done before. Some people who are broke are just jerks, but usually the poor are in a chronic situation and lack some basic, necessary element related to upbringing, mental or physical health, abuse, intelligence, etc. If Marjorie is in such a situation, she deserves some slack. If not, she may indeed just be a jerk. We don’t know.

  16. Another Personal Finance Blog says:

    Good points. One of my goals is to develop good personal finance habits in the hopes that one day I will make much more money and make that money stretch even further, instead of paying down debt I have accumulated. I cringe when people making so much more money than me still live beyond their means. I don’t want to end up like that!

  17. guinness416 says:

    Great comment Becky. And good post too, perhaps saving that other thread, which was pretty ugly.

  18. Chelle says:

    I stumbled on your site the other day, and wanted to thank you.

    Not only do you have well-written and insightful suggestions, but your frank analysis of your own financial patterns, both learned and unlearned, made me take a very close look at my own history with money.

    I have already applied many of your ideas, and for the first time in a long time – feel optimistic about my financial future. I am a single mother of 3, and although I know I fall into the ‘poor’ category with my present annual income, I don’t feel quite so ‘broke’ anymore. Nor do I feel that little twinge of despair when I think about money or the future; not with the tools and knowledge to make small differences that will quickly add up to a little more saved.

    Thank you so very, very much for generously sharing your experiences and thoughts with the world. I have already told several friends and co-workers about your site. I just wanted you to know that it’s working. :)

  19. Jim says:

    Good post Trent.

    I agree with you that ‘poor’ and ‘broke’ are very different.


  20. Kate says:

    Nicely said Trent.

    @ Becky.

    “if people can’t afford children they shouldn’t have them” (as if people born poor do not deserve family, love, and human connection)

    And yet family, love, and human connection can go right out the window if parents are ill equipped to handle a stressful financial situation and the mental burden it can cause. Children are not a right, they are a responsbility, the most precious of so. Money does not account for nearly everything when raising a child, not by a long shot, but not being able to provide for a child can put a parent in a very dark place that can wind up with disastrous consequences ….. for the child.

    While I am tempted to write more, I really don’t want this thread to be derailed the way that the other thread was. However I think we all need to be careful about scorning the generalizations of others while simultaneously making them.

    Again Trent, a very good article that not only touches upon the difference between being poor and being broke, but also address what an individual can do if they wish to help those that are truly poor and impoverished.


  21. “In short, being poor means that you don’t have the resources available to you to improve your financial situation.”

    Trent, I am happy to see you say this, but it seems contradictory to your previous entries (as recently as a few days ago) where you use the “p-word” to describe your upbringing (which personally offends me because I have seen real actual poverty up close e.g. villages in rural Africa, slums in India & South America, etc. and am fairly certain that your upbringing was luxury compared to that) – and also contradictory to previous entries where you basically claim that anybody can become anything they want to be. Maybe you’re coming around?

  22. Cathy says:

    Thank you, Trent, for acknowledging this. I got flamed when I said these types of blogs aren’t the target market on how to get out of poverty in the post about Marjorie.

    I grew up in a blue collar family. I remember my mom telling me to study hard so I would never have to scrub toilets or fold hospital corners on beds like she did. My first jobs for 10 years of my working life were minimum wage, but I had A LOT of advantages that got me ahead and I didn’t stay there forever.

    I never want to forget the way I was treated when I worked minimum wage. I’m always extra nice to cashiers, servers, janitors, etc because they get zero respect, work really long hours, and usually have no benefits. I have way too many distasteful memories of rude, overprivileged customers who treated me like, “If you work minimum wage, you must be stupid or too lazy to get a ‘real’ job”.

  23. Mike says:

    I never really noticed the difference between “poor” and being “broke,” but it makes a lot of sense. I’ve always worked for lower pay, but with experience, my base amount is slowly rising, and I’m thinking of different ways to make money on the side.

    Thanks for a nifty, somewhat language-based post.

  24. The Rich Blogger Guy says:

    Trent my boy, you’re evolving and advancing very nicely these past few years. You’ve realized that you can’t save the world and your blog can only help so many people. Keep it up.

    The next stage is where you become rich and enter a whole new level of thinking.

    Best of luck…..

  25. Yeah, basically when you are “broke” it is probably because you have made financial choices that were greedy and self-centered to a certain degree. You can redeem yourself by getting back on your financial feet and when you do, you can start GIVING money to the truely impovershed people in your community.

  26. Ann says:

    What makes this discussion hard is that so much of what passes for poverty in this country is due to behavioral choices, but once made, those choices are hard to overcome. (I grew up in Latin America 50 years ago around real poverty, and it’s always been hard for me to view Americans as “poor.”)

    How do we warn of the bad choices, without seeming unsympathetic to those who are now trapped in the results of those choices? It’s stupid to smoke, but no one “deserves” lung cancer. It’s stupid not to wear your seatbelt, but no one “deserves” severe head trauma or quadriplegia. It’s foolish to fail to take advantage of your free education, have children with uncommitted partners, do drugs, abuse alcohol, break laws and get a criminal record, etc., but a lot of those bad choices are made by very young people, and they don’t necessarily “deserve” all the consequences.

    On the other hand, a lot of poverty in the US involves people being unwilling to consider options like moving to where the jobs are, sharing housing with extended family, taking in or being a boarder, working more than a 40 hour week, things our grandparents took for granted as requirements of getting ahead. And there’s a not insignificant number who just want to keep on making bad choices; we all know them, and it’s darned hard to feel compassionate toward them.

    Circumstances in this country are so different from what so many people elsewhere have to contend with; the options and opportunities are there for Marjorie, if only she realized it.

  27. almost there says:

    Walter Williams wrote a column on how not be poor years ago. Here it is. Proving anyone can make it at minimum wage here in the USA.


  28. Erin says:

    Thanks for a thoughtful post, Brent. It is clear that you have an appreciation for real poverty and I have gotten that also from the way you enjoy giving and donating, whether to friends and family or to organizations. Being poor must be very difficult. I also agree with Becky’s post, very well said. I cringe when people are too quick to judge others for their situation. Many things can happen to lead someone into poverty – many many Americans have ended up in poverty because they have gotten sick, for instance, and have to fight the insurance companies at the same time as they fight their illness.

  29. beloml says:

    Of course, America is the only country where the poor also happen to be morbidly obese . . .

  30. Borealis says:

    Trent – You were right in your judgment that this blog is just not about those in poverty. There is a lot here that is helpful, but you really can’t do a blog for poor, broke, and those middle class people who are struggling.

  31. Lurker Carl says:

    Having been both poor and broke at various times in my life, one is not preferable to the other. Neither charity or government programs were beneficial, they were temporary bandaids at best. It’s up to the individual to climb out of their financial hole, regardless if you were born in it or created it yourself. No one can do it for you. But you can take advantage of good advice and put it to good use.

    As far as the poor being obese, the least expensive foods available at markets in the poorest areas tend to be the least nutrious and least healthful. Salt and fat are cheap fillers, it’s the American way.

  32. Good post. It made me think a bit. I’d never really (consciously) considered the difference between poor and broke and what the distinction did or didn’t mean. I vague ideas about them, but they weren’t well-defined.

  33. AverageAK says:

    “America is the only country where the poor also happen to be morbidly obese ”

    And? First of all, not true, most of Western society has an obesity problem and also most countries have poor people. and what is your point exactly?

    Go read some history. There was a lot of obesity in the Appalachians, and other regions of similar environment. Has to do with what food was available to them (simple carbs and not much else), and it didn’t make their bank accounts any bigger. In current times, this is certainly not always the case, but you don’t know the personal history of every obese or poor person out there, so what is your point???

  34. tightwadfan says:

    good post trent. I agree that there is a distinction between broke and poor. I would go so far as to say that if you can read this blog (that is, you have internet access) you are probably not poor. very few Americans are truly poor.

    However, having been “broke” myself, I think I can understand Marjorie’s disappointment. In my own case my budget was so tight that it took me a year of scrimping to pay off my $1200 credit card debt. At that point in my life I just wouldn’t be able to relate to someone who could find $17,000 in one year to pay off debt. What I could relate to at that were the hardcore methods from the Tightwad Gazette to save money.

    In your defense I think Marjorie missed the forest for the trees, your advice works for everyone, it will just take longer the less money you make. I’m just saying I think I understand why she was upset.

    to those commenting about the choices people make that end up making them “broke”, middle income and rich people make the same choices. However when you have money it gives you a cushion from life mistakes and that is what lower income people don’t have. rich kids can get into drugs or get pregnant or fart around at school and it won’t ruin their futures. for lower income americans there is no margin for error.

  35. Mondo says:

    Nice post and good distinction.

    Having come from one side of the tracks and with years of hard work managed to get to the other side….. I have noticed a distinction between the friends of mine who did and did NOT pull themselves out of it (since many came from equally lower-middle-class standing): mentorship.

    I had the benefit of loving parents (till my father died when I was 10), a very strong work ethic, and zero sense of entitlement. We were PROUD to work. I got this from my PARENTS.

    Those of my friends who did NOT get this from their family upbringing had a much harder time than even I did – many just still are in that living-hand-to-mouth mode and it’s like a veil – they can’t see beyond it because that’s all they’ve known and they have no idea that things can get any better. It’s really, really odd.

    But my point is that without the benefit of having friends and family to instill the kind of ethics – but just importantly – HOPE – it’s an up hill battle.

    So my vote isn’t just for helping at the pantry. Do that. But also, mentor and encourage anyone you can.

    As an example, I had a renter (I have a garage apartment) who was one of the kinds of folks people here routinely disparage. He made bad choices, was in his early 50s, and didn’t own a dime. Yet, the man worked HARD, brutally hard (construciton – heavy labor), most every day of his life.

    By the time he left my home 2 years later, we had worked on his credit, I had helped him save, and he had a much better handle on how (and why!) savings mattered, etc. What derailed him was the guilt factor from his daughter (he had been an absent father) – yet another form of desperation people fall into. Still, it mattered.

    Finding and helping people on an INDIVIDUAL basis is very, very powerful. Knowing you did it, and with perseverance – they can to – makes a difference. So keep blogging, but don’t discredit the Marjories who are simply tired out of their mind, and frustrated beyond belief.

    She just needs a hand up, along with a few words of encouragement. That’s all I did, anyway.

    Good night!

  36. Dody says:

    I am poor and I am not usually broke. I have 5 children. I am an Independent business person. I work 72 hour weeks, home school, and some how run my house. She said she got 20 thousand a year. We get 13k if we are lucky every year, no government help. However we make it and we even are expanding our business. People in America can always find a way, I am poor, but I ain’t dirt poor.

  37. aphexbr says:

    A great post, Trent, and a good reminder to those who aren’t truly poor that some of the great advice given on this blog is not applicable to everyone. Some Americans really do seem to consider the poor to be idiots who are somehow deserving of their own fate for being lazy, which (as a European) always saddens me.

    However, Marjorie’s comments did make me think in a certain direction for a moment, and I found myself questioning her in my own mind. First of all, so what if someone is earning more than you? If a person shows you how to save 10% of your income, does the advice become invalid simply because the dollar amount saved for that person is higher than yourself? Since I don’t live in the US, half the advice here is irrelevant (we don’t have the same coupon offers, for example), but I still find it useful…

    I’d also repeat the point above – I’d much rather hear from someone who managed to pay off their debts, increase their savings and improve their financial wellbeing than someone who is still “poor”. Would Marjorie *really* want to read a blog from a person who hasn’t improved their own financial status and is still poor? Her comment makes it sound like she was finding the advice useful until she found out that Trent wasn’t living in poverty!

    Finally, my last gasp of cynicism comes through when pondering how Marjorie was reading this blog to begin with. Many people who consider themselves “poor” will think nothing of paying for premium cable with high-speed internet access and other luxuries. If Marjorie’s answer to “where do you read this blog” would be “at home” rather than “during my break at work” or “at the public library”, then she’s not poor even if she thinks she is.

  38. Adrienne says:

    I totally agree with the distinction between broke and poor. But what’s discouraging for some of us who aren’t poor and are struggling to get out of being broke is that it’s going to take a LOT longer than it’s taken you, Trent. At this point in my life I’m doing things right money-wise, thanks in part to sites like yours. But it’s still going to take me four years to pay off the credit cards and student loan. That’s a long time to keep pushing through and there are some months where I’d really like to make minimum payments and not be so fiscally conservative for a change.

  39. VM says:

    Oh America! My parents came here with NOTHING but the clothes on their backs, 2 children and one on the way. (They were escaping the communists) Dad got 3 jobs to pay the rent, feed and clothe everyone. He did this for years until he got a job as a foreman in a lace factory! Yes – no English, but a WILL and FORTITUDE to WORK!! And work hard he did. NO GOVERNMENT HANDOUTS – just plain hard work. He thought we were RICH with that foreman’s pay. 8 children and many years later, we all own our own homes and are doing just fine. No- we are not rich or poor – we were taught to work hard and do it honestly and with integrity. Being broke is a totally different thing – for the most part is truly avoidable with the right mindset and attitude. I hope I didn’t offend anyone – I just know it can be done – I lived it!

  40. kellykelly says:


    And in return, I hope this doesn’t offend YOU, but these comparisons to immigrants coming here 40-50 years ago with the struggles I face TODAY are just not valid. Sorry.

    I would bet your parents settled into a community where they had PLENTY of support from others in the exact same situation.

    I am working my way out of debt surrounded by people are ARE NOT like me, DO NOT live with my struggles, and give me ZERO support.

    Oh yes I should just magically rise above all of that, and let there be no psychic drain. After all, I am a social animal down to my cells, but I should just *SNAP!* turn all of that off and stay focused, not get discouraged, keep sprinting through the spleen pain.

    ADRIENNE, I am so with you. I look at the long term and I could just crawl into the closet and close the door. The thought of living like this for the next four years is very, very tiring.

    OH well, back to work.

  41. Lori says:

    Hi ,
    Some say that no one is poor in North America because people in Central America are the true poor.But it is really a matter of degree.If aNorth American must choose between paying for hydro or for putting vegetables on the table this week,then they may be better off then some one else where but there needs aren’t being met.
    I Canada Here,If you loose your job and can’t pay your bills,some times it can take a long time to get another job.If for any reason a person become homeless,they loose the right to welfare.also,about two days of homelessness,who will hire them?They can’t shower or change clothes.
    It is easy to say that they should move to where the jobs are,but who will pay the bill for that move?
    In Toronto,there are thousnds of people (including many children)that live on the street.they are poor.yes ,many got there by wrong choices,but not every one.some are there because of aome one elses wrong choice.some are there because of a series of bad circomstances.
    any ways,for Canada’s poor in Canada,Your articles do help.
    Not all of your articles are useful,like the investing kind.But on articles that suggest ways to save money are.
    some times you suggest something that hits a need.
    If you want to help the poor choose some one.
    for me ,like most Canadian.poor,I earn almost enough money to pay my bills ,medication,Food and taxes.not clothes ,school expenses or repairs to my vehicle or home.so my church sit down with me each month and see what we need.and help out .we definitely seseparate need from want.but they help with some of the want some times too.they also allow me to save a little money each month so that eventually I will be able to get out of this.
    If it wasn’t for thier help I would have been homeless,with my children too.(MY husband abandoned ship a couple of years ago)
    any ways If you no of some one who is struggling and they arent stubborn,go over their finances.Help them budget .see if they can improve there lot .And give a helping hand,unless they are just lazy or greedy.

  42. Jessica says:

    While a I see the distinction between broke and poor I think there are some things that people are missing. It is hard to move where the jobs are when you can’t afford the credit to rent an apartment when you get there, let alone the transportation. It is difficult to better yourself with free education programs when you work upwards of 80 hours a week to feed your family. It is our responsibilty to aid the poor in order to stop the broke. I don’t mean state and federal handout programs. I mean petitioning to raise the minimum wage to a living wage. Giving free healthcare to children at least, programs where you can earn food in exchange for takling trade classes, giving you the time to better yourself.

    The way I see it, poor people can work extremely hard to give their children education and resources to be better off than they were; it’s commonly known as the American Dream. However, these children will spend most of there time not with their parents, they will not learn many techniques for fiscal responsibilty, they will not know how to buy food inexpensively that’s not riddled with corn syrup like their parents did, and the spending and health bills will create broke. If we would take the time out of our lives to think about the trials of others and do something contructive about it, we could really create a more financially aware society that wouldn’t have such a roller coaster of an economy. One of the most frugal activitites you can do is writing a letter to your congressman about protections for the poor; at the most it will cost you one stamp.

  43. USA-USA-USA says:

    I forgot where I got this gem. Being poor is a state of finances, while being broke is a state of mind.

  44. MT says:

    Two things:
    In regards to the poor in America being morbidly obese, American food is unhealthy in its own right. Consider especially that the cheapest foods available are pre-packaged starches, full of sodium and sugar and preservatives and that a poor person probably cannot afford a gym membership and does not have the time to devote to necessary exercise each day and it makes sense that poor Americans are overweight. Secondly, this is not the only country in which that is true.

    Secondly, there is poverty in America. There will always be. Those who have the lowest levels of income and work the hardest to make ends meet are the poor in any society. There is not absolute poverty in America, where day-to-day survival is questionable and extreme hunger is rampant (think the $1 a day standard from a few decades ago). That type of poverty has ceased to exist in America, and for that we are very lucky. However, that fact should not be enough to discredit the struggles of those who are poor in America. Spend some time living at minimum wage and in a homeless shelter or taking your meals from a food program if you think that is the case.

  45. VM says:

    kellykelly –
    Why are the struggles of today so different than the struggles of yesterday? And no, we had no support! No others like us that we knew of where we chose to live…we went without for a long time on our own – a really long time. But we got out!! Yes, you may have to wait a while before you crawl up out of the hole, but I can guarantee you, that once you are up and out, there will be no feeling like that in the world. The one huge difference I am seeing between today and yesterday is that we Americans want things convenient, easier, bigger, better, more glamorous and we don’t care if we go into debt for it. Debt was rare back then, I think, because we ‘fell for’ these things a lot less often than we do now. I do not mean ANY animosity toward you or anyone else, kellykelly, but sometimes when a situation is uncomfortable, we can be angry about it. Trust me, I’ve done that. The best thing is to not be discouraged, be excited about the future, and yes, get back to work!! I truly wish you the best!

  46. Maartje says:

    One thing that sure is different from yesteryear, VM, is indeed the debt.

    When you can’t put yourself into debt that easily, life is simple. You can spend money until you no longer have any, and then you make do with what you have. Because there’s a hard limit to your spending, you keep better track of it, because to not do so means to go hungry or beg off others.

    Today in most western countries, it’s so easy to just get more money when you no longer have any, that the hole you dig yourself into can get MUCH deeper before you even notice you’re digging one! And then, you have a much longer way to go before you get out.

  47. Jimmy says:

    @Becky #8
    Why are you saying the GOVERNMENT should do more? That is a code word for forced income redistribution through taxation.

    You say you don’t have any answers, yet you want the government to give money away. Are you taking YOUR MONEY and giving it to poor people so they can have more? In fact, are you giving half your income to the poor so they can live like you and visa versa? After all, share and share-alike, right?

    People deserve nothing they don’t earn. Life, Liberty and the Pursuit of Happiness – Nothing is guaranteed.

  48. Ann says:

    A thread may well be over when it reaches the point of debating the minimum wage, but I can’t resist commenting on Jessica’ (#32) solutions.

    Compassion can be acted on by bringing a mentally ill relative and her child into your home and feeding and housing them, as I am doing, or donating to and volunteering with charitable organizations as Trent urges, or helping your struggling neighbor by mowing her yard or fix her sink, as my neighbor used to do for me years ago when I was broke.

    Or it can be acted on as Jessica urges: write to your legislators and get them to point guns at other people’s heads to force them to do what you want done or to extract money from them with which to do it. Those who advocate for such positions rarely send extra money in to the IRS and usually demand that taxes on their own bracket, whatever it is, be lowered and that more extracted from “the rich,” who is everybody in a higher bracket than their own.

    By definition, Law is the threat of force. It should be used sparingly, and should not be confused with compassion.

    Besides, where is the compassion in raising one person’s wage at the expense of another person’s ability to find a job?

    How likely is it that a government bureaucrat can distinguish between the person who is broke, whose dignity and autonomy will be respected best by being left to sort things out for himself, and the person who is poor and truly needs a hand up?

    Not only can’t they, but they aren’t even allowed to try, with the result that after a few decades, entire generations now believe, as Jessica, that it is the government’s responsibility to see to it that everyone has what they need.

  49. Joanna says:

    Thank you, VM, for your comment, borne of experience. I think it’s inspiring to hear success stories about people who did indeed pull themselves up by their bootstraps. It can be very convicting as well, which is perhaps what is so uncomfortable for kellykelly.

    Not sure if you guys have heard of “The Oz Principle”, but it’s the focus of much attention at my office these days. I read it and its main message is powerful. Essentially, end of the day, there are two types of victims: the person who truly has been victimized on some level (e.g. our poor person) and the person who merely thinks themselves to be victims (e.g. the broke person). Neither of those people will benefit from remaining “below the line” in the victim mentality. Both of those people will benefit from rising above the line and determining how they can be personally accountable for their own outcomes.

    Another aside about the word “deserve”. I personally think we would do well in this country to let go of the concept of “deserving” things. This idea of “deserving” a certain type of lifestyle (comfortable, able to easily afford food, nice things, trips to amusement parks with the kids), or even a certain type of spouse (nice to me, takes out the trash, never forgets our anniversary), etc. drives all sorts of dissatisfaction in our lives and, ultimately, debt, divorce, addictions, abuse, you name it. And the idea of “not deserving” something works the same way. I’ve recently been diagnosed with an autoimmune disease. Do I deserve this? Of course not? Does focusing on the fact that I don’t deserve this, am to young, etc. help me to fight the disease & return to health? Absolutely not. Just a thought.

    Thanks for the post, Trent. I too appreciate the fact that you obviously put thought and heart into your work here.

  50. Joanna says:


    Wow. Couldn’t agree with you more (also about the distinction between poor in the US and poor in Latin America). Thank you for putting this in to words so well.

  51. VM says:

    Ditto Joanna on Ann’s comment, yours is terrific, and I love Jimmy’s, too! I have no idea where you all come from and what backgrounds you have, but the common-ness (?) of ideas we share encourages me further and makes me thankful for what we do have here in this country. Joanna, I hope you fight that disease with all that is in you!
    Trent – I don’t comment on things too often, so thanks for giving me the reason to do so.

  52. deepali says:

    I am glad to see this distinction being made. We like to think so, but not everything in life is a result of our own life choices. There is wisdom and peace in finding a balance between internal and external influences.
    And yes, we do have *real* poverty in this country. Less than 50 years ago, we had the type of poverty you’ll only see in sub-Saharan Africa now. Even today, parts of the US (ie, Appalachia) deal with the kind of crippling poverty that most of us never have to experience.

    And getting angry at someone doesn’t make them behave better. Just try it with your kids. :)

  53. Todd says:

    I’d like to thank Ann also for a very thoughtful post. I am so impressed with all of the readers of this blog. Aside from Trent’s great writing, reading all of your comments gives me hope in the intelligence and resilience of human beings. You all are what brings me back to reading The Simple Dollar every chance I get.

  54. I spent a week several years ago with the truly poor, in Belle Glade, Fla. It’s not uncommon there for people to live in cinderblock apartments where they share a bathroom with four other people. The apartment itself probably has a bed, a lamp, a hotplate for very simple cooking, and not much else.

    The people in this situation generally are beyond the kind of help a site like this can give. Someone who struggles to pay for three meals a day has other needs, like skills training, so they can get a steady job. Sadly, sometimes there are other things going on, such as illness or a drug problem, that have to be dealt with first.

    I would argue that if you have the means to get on the Internet, a site like this probably can help you in some way. I was in a situation a few years ago where I wasn’t making what I was worth but a raise wasn’t going to happen, and I was running short some months, so I went looking for ways to cut my spending some. Unfortunately I asked the wrong people and it took me some time to find the answers myself.

    I’m fond of pointing out to people that if you can scrape together 10 dollars a month and pay that toward your mortgage, you can pay that mortgage off a full month sooner. Ten bucks! So imagine how much faster you can pay off debt if you scrape together a larger amount of money. But if ten bucks is all the surplus you can come up with, it’s still enough to make a difference.

  55. oldmiter says:

    @ Becky

    What you fail to mention and grasp is that the American PEOPLE give a much greater percentage of their personal income to charity than the people in any other country. Does your logic suggest that the individuals in your country don’t care at all about the poor? They don’t give a ‘high percentage’ of their income to charity, so it sounds like it does mean that, and it’s good then that your government at least gives what it can to help the poor. I’m sure that YOU give along the lines of the amount in Jimmy’s comment, but few others in your country do. Fundamentally, you have described the glaring differences in the beliefs of Americans versus the beliefs of people in other countries: we are not our government and can do better as individuals but expect others to share that goal.

  56. Dan says:

    > No list of “tips” I can write can help with
    > genuine poverty.

    I couldn’t disagree more….

    1. Get more education
    2. Stop watching TV/drinking/drugs/etc
    3. Save your money
    4. Work harder
    5. Set goals
    6. Don’t commit crimes or associate with people who do
    7. Keep fit – its cheaper and you can work harder and longer if you are fit

    Pretty much everywhere in the world people do this every day and it works. Surely you can find some edge cases about disabled people in the third world, but for everyone else these tips will help your circumstances.

    I know the liberal dogma is that “We” need to help these people, but aside from the edge cases, “helping” just institutionalizes poverty.

    Pretending that the poor cannot help themselves is insulting to all of the poor who do help themselves.

  57. kellykelly says:


    As I’ve said in the past, I always enjoy reading your posts.

    Your point above (#36) about the word DESERVE are so on the mark — I actually was going to email Trent with some dissertation about it and ask him to write an entry on this word and how it muddles thinking so much.

    I think “deserve” is as bad as the word “should.” Both are dangerous and describe an abstract reality where it’s hard to act rationally.

    Ex: “I should clean the house.” That’s self-flaggelation. How about something active: “I will clean the hosue. I want to clean the house. I won’t clean the house.”

    As for me reacting to VM’s post because it was convicting, I can see how that could be true but for me, today, in this discussion, it is not. In fact, my grandparents had a similar story to VM’s. (Not my parents, unfortunately) Then I crawled out of poverty and have gone up and now back down, but nowhere NEAR as down as where I started.

    My frustration results from trying to have a discussion about problems — debt/overspending/underearning in MODERN AMERICAN CULTURE — and when people throw in examples from other eras or continents, I don’t think they’re relevant. Now I may be totally wrong here thinking this blog is primarily about TODAY and about the United States. (Just as Marjorie seemed to think it was meant just for –relatively– low-income readers.)

    Well I’ve written enough now.

  58. adifferentAnn says:

    What stresses me out about this post (and the discussion in the comments) is that I’m trying desperately to understand where I should plop myself–in the poor camp or the broke camp or in the poor AND broke camp. JUST HOW SHOULD I LABEL MYSELF? Maybe if you all would tell me which I am, then I would know whether Trent’s tips can help me or not. Oh wait, I couldn’t possibly be poor because I have access to a computer with an internet connection! Nevermind!

    And about being poor and/or broke and having children. It is a responsibility to have children, but no one else can look at your life and tell you whether you’re “prepared” to have kids. Let’s face it, no one is every truly prepared to have kids–financially or emotionally or otherwise. Perhaps their children are the only joy and comfort in life some truly impoverished people have. Trent is always talking about how the moments that bring him the most joy are times spent with his little ones. Would any of you be willing to say that he deserves those moments of bliss because he dug himself out of debt and poor habits? And I don’t deserve mine because my financial life isn’t so picture perfect? Of course not. I think you are on thin ice whenever you say people are in financial difficulties BECAUSE they had children too soon or when they weren’t adequately prepared. I guess I’m one of those ill-prepared people and it will take significant social progress to help me… barf!

    Trent, I love your blog, but I don’t want to be categorized. You just get back to the helping and let me decide if your posts are going to be able to help me.

  59. Michael says:

    Dan, that’s an insulting list, and drinking doesn’t belong there. What are you, a Christian Scientist?

  60. Rob in Madrid says:

    It is far easier to break out of a cycle of being broke than it is to break th cycle of poverty, it can be done but it aint easy.

  61. K says:

    Dan, you have not understood Trent’s distinction. Your list is a good one for people who are “broke” but think that they are poor. Genuine poverty is what you see on the street, in 3rd world countries, and there are no easy solutions. Being “poor” means:
    1) There is no means to get more education. It is either not available or you can’t afford it because you can’t even get a MW job.
    2) You don’t have a TV or any money to buy drugs or alcohol.
    3) You don’t have any money to save. You aren’t able to get a job.
    4) It takes all your energy just to survive
    5) Your major goals include “find something to eat for dinner” and “find a safe place to sleep.”
    6) Committing a crime and going to prison would actually improve your standard of living.
    7) If you are starving, you can’t waste your calories exercising.
    There really are people struggling and tips like “drink less coffee” and “cancel your cable” are just insulting to them because they imply that they can afford those things in the 1st place.
    You are absolutely correct that people who have opportunities available to them and squander them do not “deserve” any help from taxpayers. But I challenge you to go to a 3rd world country and tell those people that they just need to work harder and their life will be just like yours. Go to the food stamp collection line and tell that single mom that all she needs to do is go to school at night or get a 2nd job (which will put her more in debt because the child care costs are more than she can earn). I don’t know what the solution is to these problems, but I know it will take more than “make your own laundry soap” and “open a Roth IRA.”

  62. Dan says:

    > Dan, that’s an insulting list, and drinking
    > doesn’t belong there. What are you, a Christian
    > Scientist?

    Interesting that you assume I am a christian – I am not. I guess, in the same spirit, I should consider you a drunk.

    Ok, now that we are (hopefully) done insulting one another – why is drinking on the list?

    1. It costs money that you could be saving
    2. It does not make you smarter
    3. It does not make you more productive
    4. It wastes time that you could be studying or working

    I probably should have added smoking too.

    As for the rest of the “insulting” list:

    1. Get more education

    This should be self-explanatory but if you don’t have any skills – learn some, if you don’t have a high school diploma – get one, if you don’t have a college degree – get one, etc. Each of these steps is pretty much guaranteed to increase your earning potential.

    2. Stop watching TV/drinking/drugs/etc

    Covered above.

    3. Save your money

    Saving even small amounts of money, as you can, will result in substantial savings over time (no beer or smokes for a year will give you at least $3000 – which would buy you about 2 years at many community colleges).

    4. Work harder

    No one is entitled to only work 40 hours a week. Sometimes you have to work several jobs, do overtime, etc to make ends meet. Everything else being equal, the people who work the hardest (and increase their education) are generally the people who get promotions or at least not get laid off every time there is an economic downturn (not always true, but true often enough to make working hard generally a good idea)

    5. Set goals

    If you don’t have goals it is hard to make the right decisions. The “you hit where you aim” syndrome.

    6. Don’t commit crimes or associate with people who do

    Committing a crime (well, getting convicted) will decrease your earning potential. If you associate with criminals you stand a greater chance of committing a crime, being considered an accessory, etc. Then there a lawyer fees, time out of the workforce, lost networking opportunities, etc.

    7. Keep fit – its cheaper and you can work harder and longer if you are fit

    Being sick is expensive, keeping fit and living healthy will decrease the chances that you will have substantial medical bills, get chronic conditions, miss work, injure yourself on the job, etc.

    Keep in mind that this list is a list of my suggested tips for getting out of poverty. If that is not your goal, or you are not in poverty – then do what you like – I am not in poverty and I smoke and drink on occasion (I also have a 27″ tv I bought used 10 years ago) – these are luxuries not necessities and if you are in poverty you must fore go luxuries until you are out of poverty.

  63. Dan says:


    I have lived in two third-world countries in east asia – I’ve seen hideous poverty, and I’ve watched people work their way out of it – and it IS a lot harder in the third-world – mostly due to education issues.

    That said, they are not reading this blog. I know this because if they were, they would have a pretty good command of written English, which is a marketable skill basically everywhere. It might not get you rich, but it is enough to get you a roof over your head and enough food. They would also have basic Internet skills the ability to type a bit, etc, which are also marketable.

    Education is not always about school, for the very poor it is often learning a simple trade and often this can be done without money – in the third world trades are often learned on an unpaid basis or via barter arrangements. (we’ve short-circuited this in the US with minimum wage and other well-intended labor laws – in pretty much any country in the world I can hire a maid, gardener, and errand boy on a cash basis giving them the opportunity to be in the labor force and earn wages – here none of these are worth the $6.25/hour to me that I’d have to pay them so the portion of the work force that would take these jobs cannot enter the work force)

    Anyway – I don’t dispute that there is hard to escape poverty in the third world. People do escape it, and I believe that they way they do is generally aligned with my list of tips (some obviously may not apply).

    For the US, if you are making less then the poverty level, follow the tips and your standard of living will rise.

    P.S. I know a single mom here in the US, with no real skills and no high school diploma. She works in fast food and is going to school at night to get her GED. She works out her child-care arrangements on a barter level with several friends in similar situations. I suspect that she would be quite angry if I suggested that she should just be happy with her circumstances since they are inescapable.

  64. NYC reader says:

    Ok, let’s stop arguing about immigrants from 50 years ago vs. immigrants/poor/broke people today.

    There are often ways to improve one’s lot via education, hard work, and perseverence, even if the education isn’t formal and the job opportunities are ad hoc.

    There’s a Greek-owned coffee shop/diner in my NYC neighborhood, where the kitchen help are nearly all Mexican or Latin American immigrants (all legal).

    One guy in his 20s was a dishwasher, spoke practically no English, and working 12 to 14-hour days/6 days a week, had no opportunity to take advantage of the available (and free) English language classes given by local social service and community groups.

    He asked his fellow workers (waiters and busboys) who spoke better English to teach him the basics so he could make deliveries, which would get him tips (raising his income).

    After a few months of tutoring (basics such as counting, asking directions, answering simple questions), he asked the owner of the coffee shop if he could make deliveries. The owner tried him out and he was pleased with the rapid deliveries of the dishwasher (deliveries are made on bicycle in NYC). The dishwasher got good tips for his fast deliveries, which increased his take home pay.

    The owner promoted him to busboy. Busboys get higher pay, plus get a share of the tips from the waiters. Thus, two new ways he increased his pay.

    Instead of goofing off when not clearing tables and refilling water/coffee, he studied the menus and asked the waiters questions (in Spanish) about every dish on the menu. He watched how they served food, and helped serve when the waiters had large groups at the tables. The waiters gave him extra shares of the tips for the extra help, another way that hard work increased his take home pay.

    He worked on his English by having simple conversations with customers. When a waiter called in sick or was late, he substituted, which got him tips and even higher pay.

    He’s still a busboy, but he substitutes as a waiter at least once a week.

    His English is not great, he has to ask for help from other waiters when customers ask complicated questions, but he’s working on it and I know he will eventually get promoted to waiter.

    It’s a hard job, 14 hour days/6 days a week, but in the two years he’s worked in the diner he’s never been late, never called in sick, and has always tried to improve his skills and thus, his take home pay.

    The Greek coffee shop owner told me that he’d take one guy like this over a hundred other dishwashers. “Look at him,” the owner said. “He comes to work, he works hard, and I must have gone through 20 dishwashers in the two years this guy has been here. He asks me what he needs to do to get ahead. When his English gets better, he’ll be a waiter full-time, while the other guys will still be washing dishes.”

    I’ve seen first-hand it is possible to improve one’s lot in life, even when working minimum wage, by taking advantage of opportunities, and making one’s own opportunities happen, instead of waiting for them to fall from the sky like manna from heaven.

  65. Simply put, for most people, being poor is not a condition, it’s a state of mind.

  66. aphexbr says:


    I think you’re making many assumptions there. You are at the very least assuming the following:

    1 – That the reason a person is poor is because they’re uneducated.

    2,3 – That a poor person has money but spending it unwisely (read Trent’s article again – that’s the definition of someone who’s “broke”, not “poor”. A poor person doesn’t have the money to begin with).

    4,5 – That a person is poor simply because they’re lazy and/or unmotivated.

    6 – That poor people are criminals.

    7 – That poor people are fat.

    What an insulting, stupid set of assumptions!

    Please, read the article again. While there certainly are poor people who are fat, lazy, stupid and/or criminals, it’s certainly not the majority. You rail against the state helping people out, but who’s going to pay for the education, childcare, etc.? Not the poor person – if they were able to do so, they wouldn’t be poor. You talk about crime and health – many people are poor because past mistakes have made them almost unemployable or because of previous health problems. “Keep fit” isn’t going to help someone who’s poor because of a crippling disability. “Stay out of trouble” doesn’t work when it’s something you did 10 years ago that’s causing you problems now.

    Yet again, another set of “tips” from a person who has clearly never experienced poverty and thinks that because he’s never had serious problems that destroyed his finances and/or employability, that nobody else has. Pathetic.

  67. john says:

    I think the difference between broke and poor is just a difference of degree. The way out of poverty is to figure out a way to make money. The standard way is to work, invest in yourself through education, and save money. Poverty occurs when you can’t do this. Sometimes, it’s not entirely someone’s own fault.

    To digress a moment, consider the situation of a wealthy heir (like Paris Hilton), a trophy wife, a himbo, or someone who simply married into money. There’s no particular reason why they should be spared the suffering that the poor experience. The way they escape poverty it is by using other peoples’ money.

    Now, consider the real plight of the poor.

    Consider the permanent homeless. Most have a mental illness that makes it difficult for them to hold on to a job – and many can’t even get it together to deal with the welfare system. When they cannot get family help, they end up on the streets, and eventually start looking so bad that they’re not likely to be able to get a job.

    Consider the war veteran with PTSD. They suffer flashbacks that drive some to withdraw from reality. They lose confidence in themselves, and need help. They’re not going to be able to hold a steady job, unless the have extraordinary skills. If they lack cash, and don’t get rescued by family or welfare, they’ll sleep on the street.

    Consider the ambitious people who live in a poor country. They may have the will, but, the opportunity may not exist. Without bootstrapping capital, they may never escape poverty in their lifetime. Barack Obama’s grandfather was a good example – he was “poor”, and basically died only slightly less poor after working for the British colonists. What he could do was eke out a bit of opportunity for his son, give him some perspective on the world, so he would then emigrate to America seeking opportunity. It basically took two generations to develop some wealth, and it required that one generation move far away!

    That story could apply to the USA, too, by the way.

    “Opportunity” in the US is mostly in the cities. What this opportunity really is, is an accumulation of capital and people (labor), and the social structures and customs that regulate both.

    Many of us Americans like to belive in the Horatio Alger stories, and the ideas of “grace of God” giving wealth to the good. It’s mostly B.S. This country has a lot of opportunity, but, most people don’t live here. Even within the country, it’s cities that have the wealth. And within cities, not every city is “equal opportunity” if you know what I mean. And within the cities, not everyone can handle the culture and get into the whole process of getting and holding a job.

    Now, all things considered, it is much easier to stop being poor in the USA than in most other countries. On the other hand, because of a lack of widespread welfare, it’s also easier to become poor than in some western countries.

  68. Shellie says:

    Thank you. My family fall into the “both” category. I actually got goosebumps when reading this post. I could not have found a more well-written and compassionate post anywhere. I do read your blog almost every day because it gives me insight on how to help the “broke” aspect of our lives. But the fact of the matter is we are a one income family out of necessity with three children. The fact remains that we may be “poor” for a long time to come, and we are ok with it. I read these blogs to gain ideas on how to shave where we already aren’t (your laundry detergent article was great!). Thank you for your compassion and insight.

  69. hippykidz says:

    Thanks Trent, It often helps to have it spelled right out for you. I read the previous article and was inspired then into new thinking. This helps to solidify some of those new ideas.

  70. When I started my blog, I had to think “who am I writing for?”

    I decided I would be most helpful by aiming at the middle class / working class, specifically those who are struggling to stay in that lifestyle.

    Even though I occasionally include announcements of interest to food stamp families, the fact is that those people already are in the charity / public assistance system and should be getting referrals to appropriate agencies if our community networks are following up correctly.

    I think the financial bloggers are most effective at reaching those who trying to keep what they have already achieved … but have new financial challenges because of layoffs, higher cost of living, falling property values, expensive medical bills and such.

    After all, the bloggers are talking to people who have some education and resources to the extent they know how to use a computer.

    The other consideration is that the middle class is generally cut out of the loop for many traditional assistance. Many of them make too much money or have too many resources, even with the lower income, to qualify for a lot of programs that we typically think of “assisting the poor”.

    So what can they do to stretch their finances and keep the bills paid?

    They learn new skills and ideas from people who’ve been there, done that.

  71. Cheaplee says:

    I don’t believe the very poor give up hope. There will always stories of people who were in the exact same position. Instead of personal finance advice (of which I am sure most poor people are already doing), concentrate on the other side of the equation – INCOME: find other posts on negotiating a raise, continue to look for a better job, use free like the library to help.

    Another step is to draw a path to where you want to go. A million dollars is not good enough. A million by being a real estate mogul, or hair shop owner, etc. Then interview those that are already “there” just how they got there. Concentrate on the steps it took to get there. Then continue with education: use government resources, like the library or economic development office or the local chamber, where they have books and courses to elevate your understanding to get to that level. All of this is free. If you are struggling to make ends meat, saving may not be your best investment of time. Invest in yourself first. Get yourself to a point where you can stand, and then educate yourself to go further. In the end, it’s not the goal but the step by step pathway to get there that’s most important. All the best… Lee, Cheaplee

  72. Dan says:


    I re-read the article as you suggested – I still stand by my “insulting” list of tips.

    In lieu of answering your points directly, I’ll ask a question (I realize this can be considered kind of rude, but I think your answer is important to the discussion at hand.)

    Imagine you meet a young poor person (In the US), who is basically a clean slate (i.e. hasn’t committed a felony, healthy (all of their parts are attached and work properly, no addictions, no diseases, etc.))*

    They ask you, “What can I do to escape poverty?”

    What do you say?

    Trent said he had no advice for them and I offered an “insulting” list of tips.

    How about you? What tips could you offer them?

    *I consider foreign countries, convicted felons and the significantly disabled to be edge-cases in this discussion that would require different advice to some degree.

    P.S. I fiddled with the census web pages a bit and the best advice, statistically, looks like it is to get married, stay married, don’t have any kids, and save for your retirement.

  73. Dana says:


    That was a great post. I am a single mother of 2 who has been in the poor group, now I’m just in the middle between poor and broke. Right now I am working full time and going to college full time and am trying to work on my financial situation. As my income went up so did my spending, until I found this blog. The helpful information that you give is valuable to the poor and the broke and the wealthy. Right now I’m needing to pay bills, but next I want to get out of debt and would like to start saving for the future. No matter what type of income level your at, many of your frugal tips can help. If you can save even $5 a month your better off than you were. Now I have the knowledge and with knowledge comes success. I want to say thank you very much for this information, it has made a huge difference in my life.

  74. poor boomer says:

    almost there said:

    Walter Williams wrote a column on how not be poor years ago. Here it is. Proving anyone can make it at minimum wage here in the USA.

    How does Williams “prove” that anyone can make it on minimum wage? All he proves is that full-time work at minimum wage puts you above the flawed government-defined poverty level, and that is hardly the same as making it.

    Williams cites the “making it” income of a married couple with two minimum wage earners. Well I have news for Dr. Williams – which shouldn’t even be news, since George Gilder wrote about it 25 years ago: men earning minimum wage are generally considered unable to support a family, and “unmarriageable.”

    Indeed, men earning minimum wage have an extremely low marriage rate.

    Who does Williams think he’s fooling?

  75. Mona says:

    Wow! I wish I had been part of this discussion when it was “live”. I was a single mom… with 2 children by age 19. I can tell you first-hand that poverty and “broke” is completely different. “Broke” is a momentary state, while “poor” is an overall condition. Being poor, or in poverty is generally a condition you find yourself in that is greatly outside your own control (while possibly influenced by poor decisions) and is something that one cannot pull oneself out from alone.

    If this topic should arise again, I would love to offer real advice for those in this condition – as the current recession is ripe for this kind of information. (if not advice, then anecdotes for how I overcame it)

    I am now 40, both children grown and doing well. I am a loan officer, credit consultant, and make the ominous attempt at steering people toward good money management.

  76. Lee says:

    Great list Dan. The more we (as a country) have spent on the ‘fight on poverty’, the more we increased the number of people in poverty. You can’t motivate someone by free handouts. ie., grants for college. The majority of those going to school on other people’s dime do not graduate. Of those that do, they get the fairly easy – and therefor worthless – degrees.

    Personal responsibility is the key. Liberals, with their foundation belief that people are stupid and incapable without government intervention, cannot stand this concept. And that’s why the billions of dollars thrown away on welfare, grants, food stamps, EIC, medicaid, etc – have only served to INCREASE the number of people in poverty over the past 60 years. Socialism, ie., confiscating tax dollars from those that work hard to give to those that don’t, doesn’t make for a strong economy or a strong nation.

  77. denise says:

    I think it is insulting that you just throw in the towel on the so called poor. In this country, most poverty continues because of poor choices and behavioral negatives. i gree up in harlem and i have seen the poor choices people make and then want to blame “the man”.

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