My wife recently posted an article that said perfectly, Being poor is expensive! I could not have said it better myself. As writer Eric Ravenscraft wrote, “When you’re broke, you can’t do all the little things that will improve your budget over the long run. It actually costs more to be poor!”
Early in our lives together, my wife and I purchased a used car. A Chevy Malibu. To this day, we still refer to “Mali” and think of her as our first learning experience and our turning point when it comes to stupid tax! I took Mali in for a check-up one day. I was hearing something that wasn’t quite right, and I couldn’t quite tell what it was. Back then, I knew less about cars than I do now, which is still very little. When the mechanic returned with the news that he could not allow me to drive Mali in good conscious because she was unsafe to drive, it devastated my world. The fix, he said, would cost me $1000 to get her ready to drive. One thousand dollars, I thought to myself. By my facial expression, you would have thought he told me it would have cost a million dollars to fix my car. At the time, I was deeply in debt, with no money in savings, and living paycheck to paycheck. $1000 was not going to come my way easily any time soon. The mechanic did offer to put me in a new Nissan. After all, I did have to get home, and the service station was not equipped to keep me there until I came up with the money to fix Mali. I ended up leaving Mali there, and I purchased a $20,000 vehicle with my only slightly broken Chevy Malibu as a down payment. I did say it was my first stupid tax! They had me!
A few years later, I panicked when the gas prices started to rise. I traded the Nissan Quest for a “smaller” vehicle, the Nissan Altima! Of course, the gas tanks in both vehicles were exactly the same size, thus keeping how much I paid for gas exactly the same. Again I paid a bit of stupid tax! It was only then that I truly discovered the power of living on a budget.
When I tell people this story, they tell me, “That’s why you need a credit card”! They tell me about the rewards I could have accumulated, for fixing my car and buying gas. But, what I leave out of the story is, how I got into debt in the first place. I bought into the notion that I needed a credit card. And that the rewards would benefit me if I could only accumulate enough reward points. I usually leave out that every dime I had at the time was going toward paying the minimum balance on my credit cards. Yes, plural! Oh yeah, and they were all maxed out! By the time I knew it, I was so far over my head, that one bad day would have pushed me overboard. That is when I discovered Murphy’s Law!
Needless to say, I will never make such mistakes again. I vowed that I would never be caught without a buffer between myself and Murphy. In fact, I wanted him out of my house. Although it took me a while, I learned that any offer developed by a credit card company is designed to keep more of your money in their pockets, and as long as they had my money, I would never get ahead.
Over the years, I’ve asked myself, had I been smart enough to maintain an emergency fund then, would my life have been any different? Well, obviously, it would have. But back then, my emergency fund would have been on a credit card, and I would not have been able to maintain it. I would not have learned the valuable lessons that life had taught me. I probably would still be falling into the trap of 30 days being the same as cash, and still, I would probably still believe that 10,000 sky miles are the same as having money in the bank.
Yes, being poor is expensive, but there is a cure to a lean purse. 7 of them, from what I’ve read! There are many writers that want to tell you how to be rich. Even one of my favorite authors says, “If you want to be rich, do what rich people do.” Even doing that, however, has gotten many, into even more debt and trouble. I think that conversation needs to start with how not to be broke! I truly believe that being “poor is a state of mind; being broke is a place that you are just passing through.” Not being broke keeps you out of situations like the one that I found myself in many years ago. Going through it, however, has taught me that If I did not want to be broke anymore, I needed to keep more of my money in my pocket.
Here are a few things that I have learned and that I now use to keep me from being broke:
- Realize that being broke is fixable! It takes a lot more work to get out of the “I’m poor” mentality. When I was broke, I felt that there was nothing I could do to change the situation. It destroyed my confidence and kept me from seeing all of the solutions that were available to me. The best way to fix being broke is to increase your income and lower your expenses. With my wife and I both working full time and two kids at home, I realized that getting a part-time job was a sacrifice that I’d have to endure for a short period of time. Although it kept me away from my family, it gave me enough money to build an emergency fund and get caught up on past-due accounts, as well as pay off the majority of my debt. Some of the other things that we did were:
- We limited the amount of meals that did not get prepared at home. Stayed away from restaurants and fast food.
- We also realized that date nights at home were just as romantic, as going out.
- For a time, we focus on your income essentials. Ensuring you have Food, Shelter (including utilities), and transportation helped us to be at more ease.
- Cash in the bank has power! Let me say that again, Cash in the bank has power! As soon as possible, I hope that anyone builds an emergency fund. With the extra income from the part-time job, once we were caught up, we were able to build our first $1000 emergency fund. That was the most money that we’ve ever had in the bank at one time. Once we had that, my confidence began to rise, and I started to see a way out of all of the mess that I’d created. Your emergency fund is protection against predatory lending practices.
- Start with a basic emergency fund. As soon as possible, build a savings account of $1000. If that goal seems unreachable, start with $500.
- Once you’ve reached your basic emergency fund amount, use those same funds to jump-start your debt payoff if you have any. Use the snowball theory to determine how to pay off your debt.
- Eradicate credit from your life. Use cash!
- Finally, Use a budget. Living on a budget changed my life. Yes, I did get made fun of when I told people, “It’s not in my budget”. But, today, I have no debt and have full access to my income. Most importantly, I’m not broke! A budget, plain and simple, is you telling your money what it should do, instead of your money telling you where it is going. Use the 7 cures to a lean purse to start you on your way to not being broke.
Caveat!
I realize that there are many different family structures and situations. For example, my wife and I were both fully on board with the idea of being debt-free and supporting each other in all of our family needs! I am also aware that, our support of each other helped us to reach our goals successfully. After reading this, if you find you don’t have the support system to help you reach your goals, I encourage you to reach out to friends, family, or a local church for support.
For me, studying and learning how money works, what rich people actually do, and how to build wealth helped me to see that there is a way out of being broke. I almost let being broke knock me out. It wasn’t until I was reminded that life “… aint about how hard you get hit, it’s about how hard you can get hit and keep moving forward.” -Rocky-
Resources
- Being Poor is Expensive By Eric Ravenscraft
- Total Money Makeover by Dave Ramsey
- Find a Financial Peace University Class near you
- The Millionaire Next Door by Thomas Stanley and William Danko
- The Richest Man in Babylon by George S Clason
- 7 cures to a lean purse
- How much life can I afford
Corey Stokes 
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