Nobody thinks about achieving poverty. Poverty is considered a failing action, the result of not being successful or of squandering opportunities given to us. Here are seven areas that will ensure a consumer never arises above the poverty level—seven lessons which can help you to improve your financial lifestyle.
1. Overspending on mortgages or rent.
It’s easy to budget for the little things but what about the major non-controllable expenses in your life? If you are spending more than 30% of your gross on rent or mortgage payments, you may be fighting a losing battle.
2. Overspending on vehicle costs.
Don’t conclude that if you spend less than 10% of your gross on car financing that you’re driving towards financial freedom. You also have to factor in repair costs, gasoline, and other automobile expenses.
3. Paying back payday loans or cash advances.
Before taking out a loan you really have to sit down and calculate the costs—not just for the immediate present but also for the long-term. Credit card debt also can be a silent wealth killer, especially if you have high interest rates that bite a chunk out of your monthly payment.
4. Surviving, as opposed to accumulating
If you notice that you are just surviving on a month to month basis, as in paying your bills and having enough left over to buy your own leisure, then you are not accumulating any wealth. You have no “cushion” to fall on, even in the event of an emergency!
5. Failing to budget
If you don’t know how much money you have or where it is going every month then how can you ever expect to build wealth? Building wealth requires a steady cash flow, made possible only by careful planning.
6. Squandering what you have.
This doesn’t just apply to impulse buying but also to the mindless authorizations that come from everyday life. Do you pay attention to penalty fees, financing rates, and taxes?
7. Separating wants from needs.
This is the most important factor that separates the poor from the wealthy. The poor impulsively spend their money now, while the wealthy save regular surpluses over time, putting their basic needs first and their wants in the future.
