Don't feel bad though. These self-professed gurus rarely agree with each other either.
So, while they are arguing about whether money should be invested, saved, spent on valuable items, or spent on life experiences, lets go look at what poor folks consider to be the worst (as in most repetitive) financial advice they hear from these masterminds of money...
These opinions don't come from one source. I chatted around with some people from all walks of life.
The one thing they all have in common is that at some point in their life, they were dirt poor, (as in peanut-butter-for-every-meal-poor) and didn't want to stay that way forever.
Getting out of that hole can be hard. But sometimes it can be even harder to go day after day hearing advice like:
1. Just Spend Less
There is actually a point on the wealth/poverty scale where you can't spend less without becoming homeless and destitute.
I'm not sure if this is something many people cannot comprehend, or something that most choose to ignore because there is no easy solution.
Spending less seems like the easiest advice to give because for the most part we have some control over what we spend and tons of people do spend on stuff they probably don't need.
But even the most frugal people still have expenses, and after a certain point, those can't get any lower.
One way this advice can hurt low income families is when they have children. There is advice that told them to:
- Never turn on heat or air
- Skip meals
- Shower once a week or shower at a relative's home
- Walk everywhere regardless of weather
- Live on just beans and rice
- Re-use dirty dishes
- Try living without water
- Live without a refrigerator
All of these are rather extreme frugal living ideas and they could cause families to be investigated for child neglect!
Even if you don't have children, going to such extremes might be possible, but that doesn't mean it it would help you be the best you possible. In the long term, how well could you focus on your job, side jobs, and goals if you were exhausted, miserable, hungry and freezing?
2. Just Save Some Money
As much as I love the challenge and thrill of saving money and watching it build, even I have to admit that people throw this idea out like its a new concept way too often.
I've met all sorts of people, but I've never met a person who didn't know about saving money, even if they didn't do it.
In another post, I touched on how the pressure to build a huge emergency fund was often stressful for savers. Same concept here...experts try to make it sound sooo easy to put back huge amounts of money. When people can't, they get the whole:
"Have you tried? Have you tried really hard? You must be doing it wrong." As well as the advice to spend less, (see above).
Like, people can just wee out money if they really wanted to!
3. Just Get Debt-Free. Then You Will Be Fine.
Contrary to popular belief, some people can be debt-free and still be poor. Especially in areas where the basic cost of living and the average wage don't always meet on even ground.
People who were in or had been in this situation agreed that while some people just find debt annoying, others live in terror of ever experiencing it.
One lady said that at a certain time in her life, owing just $100 would have thrown her thrown her into the hole deep enough that she could have never recovered.
I'm not saying that getting out of debt isn't a great goal. But when you are barely managing to survive each bill cycle, and you live in fear of just one thing being more expensive than usual, then you probably don't have any extra money to "double-down" on mortgage payments even if it is worth it in the long-run.
This is similar to shopping. You know how it is when you need to buy say, a pack of four light bulbs. But the only package available has 20. And you only have enough cash to buy the four pack.
Even though the 20 pack is a deal, and worth it in the long run, you simply don't have the extra money right then.
(And that is also why advice to use coupons, shop in bulk and buy quality over quantity doesn't always help poor people either!)
4. Just Ask For a Raise!
And it will happen! Okay, maybe not. Probably not.
You can also threaten to quit. In some jobs, all you will get in response is:
"Don't forget to turn in your uniform."
When people give this advice, they assume that not getting a raise means you aren't working hard enough to earn recognition. It totally discounts the fact that there are some jobs that are just not gonna give you a raise no matter how awesome you are.
5. Just Go Back to School
This one can be frustrating and scary for many reasons. Financially, it might be impossible to return to school (and student loan debt) every time a career field dries up.
I'll directly quote a dude known as "Calvin" on this one:
"After being told three times to go back to school, I now have three degrees and yet still find myself in a field that is beginning to shrivel around the edges.
Rather than providing more jobs for the degrees we have, we are being kicked back into the abyss of debt as punishment for choosing the "wrong" career.
At 42, I no longer have the time, the energy nor the inclination to pursue yet another $50,000 Bandaid to hold me together for a few more years. "
Education might be gold, but sometimes "just going back to school" doesn't solve the deeper problems.
We see a lot of media stories glorifying the person who "hustles" and works three jobs, raises their kids alone, keeps an amazing house and goes back to school like it's all as easy as eating pizza.
And I have tons of respect for the people who do.
But that doesn't mean everyone can. And not being able to do it may having nothing to do with their hustle, and a whole lot to do with the flexibility of their jobs, their childcare, their health, their location, etc.
And even if they pull it off, they aren't guaranteed a job, an amazing income or a stable future either. So it can be a good choice for some, but it can't be a cure-all for everyone.
6. Just Invest Your Money and Let It Work For You!
This is such awesome advice.
For anyone with extra money.
And even though the gurus swear on a copy of Dave Ramsey that anyone can scrape up a couple of thousand dollars to get started...not everyone can. At least not right now.
They also tell you to be successful in investing you have to not care if you lose that money. You have to take risks and enjoy it, so you won't have a nervous breakdown if something goes wrong.
Although lots of poor people might be able to scrape up the money eventually, that money is usually already destined for something more urgent.
I mean, I know someone who is excited because her tax return means she can get her four year old his new hearing aid and speech therapy. She isn't going to choose between a hearing aid and investing. The money is already designated. And even if she did take the risk and invest that money, she would certainly be devastated if she ended up losing instead of gaining.
7. If You're Getting All That Free Money, You Should Use it to Get Ahead
This is directed at the people who have had to use government assistance. Heaven knows that if you ever have to ask for help you are doomed to wearing a scarlet letter on your chest.
Along with the "shame on you's", there is also this misunderstanding--some people seem to think that you get handed thousands of dollars in a sack each month.
I'm not sure if these money-sacks are real. What I do know is that the last time my husband was unemployed (two years ago) we qualified for $200 worth of food stamps per month. That was it.
There was no money handed to us, no assistance in paying bills. No free house. No free phones or manicures or BOGO coupons for Corvettes and Nikes.
Everyone's reality is different, but looking back at that time, there was certainly no way to "get ahead".
Even if you start earning anything extra, it is subtracted from your food allowance, and that extra cash you just earned goes to cover what assistance no longer provides. It's not like you are going to have thousands of extra dollars "saved" because of food stamps that you can invest or put into your savings account.
It might be "free grocery money", but it certainly isn't a free ticket to paradise!
Note: I do get that there are people who game the welfare system. And I hate that they do it because it means hell for people who just need temporary support. Always think of the good guys, not the bad guys, when you see people accepting assistance.
8. You Should Try to Earn More Money
No kidding? Is that the secret? How many times have you heard someone mention this one?
I get people are trying to be helpful, but I'm pretty sure most people know that earning more money would really be cool.
Again, local economy plays a big part in how much a person can earn (and keep), even if they work themselves to death.
The common advice to take a second job isn't always practical either. You have to be very lucky in some places to find two jobs that are willing to share your time.
For example: the "easiest" jobs to snag here are usually part time jobs (no benefits) with fluctuating schedules. So you work a couple of day shifts, then an evening shift, then a night shift or two, then maybe four day shifts in a row...
And it changes from week to week. It can change if your co-worker gets sick or your boss just decides to tweak the schedule. Now imagine trying to line two of those up so that your shifts never overlapped?
No. What usually happens is that the hiring manager for that second job is going to see you as too much trouble to work with. Especially when there are 100 other people in line who want the job and don't have any conflict in their schedules.
9. Live Below Your Means
This is similar to spending less, but a little more serious. Usually when someone says this, they mean people should start getting rid of things like houses, cars, utilities and other "trinkets" that cost so much to maintain.
It works for some people. It does.
But hey, some people already live without stuff. That doesn't magically make them any richer.
Transportation is always the first thing people recommend you ditch in order to save on expenses. That might work in the cities, but it does not work in rural areas. Where we live there are no buses, no cabs, no trains.
You would pretty much have to walk or bike 10 miles at least, clinging to the shoulder of busy highways, through a lot of rural area. Twice a day.
Not impossible, but not exactly practical either.
There Is No Single Best Cure for Poor, Darnit.
The sick, sad truth is that there is no 100% guaranteed solution for everyone. I'm really not dissing people who give financial advice (as long as they've tasted their own recipe, so to speak.)
Just having a bit of fun (?) thinking about budgets and saving and all the times I've heard people try to solve the poverty problem with some pretty wild ideas about what causes it.
Now it's your turn. What is the least helpful piece of financial advice someone has given you when you were going through lean times?