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Are you one of those people who is always asking yourself, “why am I poor all the time?”

When Jeff posted an article a few weeks back citing that 62% of Americans had less than $1,000 in their savings accounts I was astounded.

How was it even possible that a majority of Americans could have less in savings than me?

Check out the chart below and see where you fall:

Check out these startling savings accounts statistics! How are you doing with your savings?
Chart courtesy of
Full stop.

Wait a minute…

44.5% of you don’t even have a savings account?

If you’re one of these people, don’t admit to it in the comments, do yourself a favor and at least open an account. I like Discover Bank because of their high interest rates on savings.  There’s lots of good online banks to choose from though so feel free to find one that fits your needs.

Alright, moving on.

So, even though I am fortunate enough to be a part of the apparent 13.8% of Americans that have $10,000 or more in savings I still feel like I am only a few bad breaks away from being broke.

And that feeling kind of sucks.

For those who have less, I can imagine the stress is unbearable.

According to GoBankingRates, Jeff’s figures may even be understated (the true percentage of Americans with less than $1,000 in savings may be closer to 73%). How in the world do we expect to retire when we can’t even maintain $1,000 in our savings accounts? Where in the world do we expect this money is going to come from?

I understand that everyone’s circumstances are not the same as mine. I understand that it is much harder for some of us to put aside each month into our savings. That said, there are areas where we can all improve.

Related: Start Managing Your Money Like an Adult [5 Practical Tips]

Let’s highlight those.

If you’re one of those people that is asking yourself always asking yourself “why am I poor?” then odds are you are falling into one of the 10 pitfalls on the list below.

10 Tips to Help You Break the “Why Am I Poor” Cycle

1. You make the B.I.G. mistakes

Never mind the rest of the items on this list. If you can focus on avoiding the B.I.G. mistakes you’re taking the singular most important step in fixing your money problems.

B:  You Don’t Have a Budget

66% of Americans don’t have a budget (which helps explain why average American is over $123,000 in debt).

Even a basic one goes a long way in helping guide your spending decisions. If you have no idea where to begin, start with the 50/20/30 rule.

  • 50% of your net income on housing, food, transportation costs and utility bills.
  • 20% into savings/paying off debt.
  • 30% for you.

It’s important to remember that this is based on your net income. Don’t make budgeting decisions on your gross pay or you’re going to be sorely disappointed when taxes start coming out and you wonder why you’re still struggling to make ends meet.

I:  You Ignore Your Money Problems

I cannot say enough about this concept. You have to go from asking yourself “why am I poor” to actually doing something about it. Money problems can lead to immense stress, relationship strain, anxiety and even depression. Bad decisions can get you to where you are, but you exponentially worsen them by not getting the help you need in tackling the problem head on.

Do not be too afraid to ask for help. Take the time to educate yourself. There is nothing more relieving than knowing that you took that first positive step in the right direction even if you’re still at rock bottom.

G:  You Go Out Too Much

The 50/20/30 rule is especially helpful to people in this category because those proportions start to look like 50/0/60 where you’re likely maxing out your spending on essentials, saving nothing and driving yourself into debt with discretionary spending.

Whether it’s eating out, shopping, the lottery, doesn’t matter. We all have our vices and it takes discipline/lifestyle changes to correct the root of our overspending problems.

Tip:  If you’re looking to get ahead, focus on your spending in this category; it can make a huge difference as it is the easiest to change.

2) You are worried what others think of you

Everyone struggles with this.


Don’t tell me for one second that you’re one of those people that “doesn’t care what anyone thinks”. You’re a liar.

…that Michael Kors bag you overspent on when a $14 Walmart purse would have done…that $90 polo button-down you bought…the iPhone 7 you just HAD to have (despite your fully functional 6s having no problems)…

Society exerts enormous pressure to buy these things under the guise that you won’t fit in without them. It’s incredibly effective too. It’s okay to have nice things and to treat yourself once in a while but don’t make a habit of it if you’re struggling to bump those savings.

If someone was auditing your expenses each month would you be embarrassed by what they saw?

Would the list of big purchases weigh on your conscience?

3) You have expensive habits

Gambling may be one of the reasons why you are poor.If only the ATF dealt with gambling they’d be regulating the quadfecta of things that often deal a devastating blow to your take home pay (pun intended).

Alcohol, tobacco, firearms and gambling…they’re all addicting to various degrees (no really…per the ATF, the average American household owns 8.1 guns as of 2015 – at several hundred to even several thousand bucks a pop, we’re talking a lot of money).

Seriously, check out these figures:

  • The average smoker spends over $2,000/year ($5,000+ in NY)
  • The average adult spends over $500/year on alcohol
  • US households spend $162 yearly on lotteries on average; for low-income households, the figure is $289 and for those who make less than $10,000 it’s $597, or around 6% of their yearly income

If you’re working a full-time minimum wage job (or close to it) and wonder where all of your money is going? Ummm….well, yeah. I think you can figure it out.

4) You dropped out of school

Perhaps not literally, but at some point along the way you fell short of your doctoral degree. No big deal (I don’t have one either), but just about every study ever published confirms that on average, the more schooling you complete, the more that paycheck swells.

According to U.S. Census Bureau projections, over a 40-year career, a worker with a bachelor’s will earn $1 million more than a worker with just a high school diploma. That’s $2.42 million versus $1.37 million… a master’s degree bumps up that figure to $2.83 million.

That being said, a degree in certain fields isn’t always worth its weight in paper.

Do your homework – find something you enjoy that will provide value/a positive return on your higher education investment.

5) You ignore the painful power of interest

So you were young and dumb and maxed out a credit card because you were desperate. Not an uncommon occurrence. But that singular decision can have a lasting impact. Sure missing a payment lowers your credit score making it harder to get a car loan or that mortgage you’ve been hoping for…everyone knows that.

But that’s not the problem (okay that is too), it’s the crushing interest payments that you’re not fully understanding. If you send in just the monthly minimum (2% of the balance) on a credit card with a $5,000 balance and 15% interest rate, it will take 32 years to get rid the debt, and you will pay nearly $8,000 in interest on the original $5,000 balance.

32 years.

Stop making minimum payments on things. You’re screwing yourself financially and making it all but certain you stay in the “why am I poor” all the time cycle.

6) You spend too much time watching TV and surfing the Internet

Everyone needs some down time regroup, relax and refocus. But there is a difference between all that and being a straight up couch potato.

Are you wasting too much time surfing the web?Consider this, according to Thomas Corley (a Business Insider featured Author), 77% of people who struggle financially are spending an hour or more per day watching TV. On top of that, 74% are spending an hour or more surfing the Web. That’s two (or more) hours each and every single day on average that you’re more or less wasting your time.

On the flip side, wealthy individuals spend their time pursuing activities that promote self-improvement, volunteering, working a side-job, and/or chasing a dream that might otherwise lead to more financial reward.

Stop asking yourself “why am I poor?” and do something about it.

You don’t have to make it your life’s work to get rich. But if you’re falling behind, odds are you’re wasting your time doing otherwise useless activities.

7) You think you can afford your house or car but you cant

Remember that 50/20/30 rule we talked about earlier? Sure it’s a guideline, and if you’re tweaking it just a bit, I’m not going to yell at you…but if you’re blowing it out of the water, I may have some choice words for you and the hole you’re digging yourself into.

Let’s look at my situation as an example:

I’ll gross around 60k this year at my full-time job (for the sake of this example, I won’t include any of my side hustle pay). I’ll probably net somewhere around 42k after taxes.

50% of my monthly income for essentials equates to ~$1,750/month.

If I assume my housing should be no more than 25-30% of my monthly net income (general rule); I can afford up to a $1050/month mortgage (my housing is $515/month so I’m definitely saving some money here).

So yeah:

  • Housing: $515/month
  • Vehicles + Insurance: $400/month
  • Utilities: $200/month
  • Groceries: $300/month
  • Health + Dental Insurance: $150/month (yay for being a young, healthy male).

Total: ~$1550/month.

It’s costing me just under $1600/month (a conservative figure) for the bare bones essentials…I am barely making it under the $1,750/month I can theoretically afford and that is with fairly cheap housing. Coming in under the 50% allows me to have a little extra money to play with and/or save.

This scenario took me less than 2 minutes to look at it. Apply it to yourself.

If you’re exceeding 60% on the essentials you likely can’t afford your house and/or your car.

That might come as a huge punch to the gut as we are often extremely attached to both.

Suck it up – it’s not worth the misery that is attached to driving yourself further into debt. It may be time to look into selling one of them.

8) You buy only what you need at the time

Of all the things on this list, the concept of buying things in bulk seems like the easiest thing to do – yet most of it don’t do it?


Because we’re afraid of sticker shock. Or receipt shock. Or whatever you want to call it.

You see this massive bill for stuff you bought in bulk and your stomach rolls.

Oh, stop.

Be proud of yourself, you are saving a ton of money in the long run. As long as you’re not stretching yourself too thin during any particular month, this is absolutely the way to go.

If it isn’t perishable, buy it in bulk. Stop buying one tube of toothpaste at a time. Stop buying 4 rolls of toilet paper that you know you’ll go through by next week – some of you faster than that 😯 .

What are you people doing? Stop it.

9) You can’t ever seem to say “no” to a good sale

I am pretty sure my mom could be featured on an episode of TLC’s Hoarding: Buried Alive. My parent’s house has piles of useless stuff they don’t need and/or no longer use because of the awful, wretched, no good concept of a sale.

For some reason those little, red, flashy signs announcing to the world that this item is 25% off! triggers something in her mind that goes something along the lines of “Wow! What a great deal. I simply must have this now.”

Congrats you saved $10.00 on a nice pair of paints. You also wasted $30.

And while her example may be a little extreme, it’s something we all struggle with. Learn to say no.

When you’re at the store next time and are tempted to make that same type of purchase, do yourself a favor and move on.

10) You don’t have a side hustle

We have all heard a joke about hustling the street corners at night to make a little extra money…

Fortunately most of us will never have to go to such extremes to make an extra buck.

But if you’re struggling to make ends meet and you have no way up at your legitimate day job/no improvement in sight…you need a side-hustle.

There are literally hundreds of ways to make extra money, some more suitable than others.

If you need a side-hustle but aren’t sure where to start, check out these related articles:

We all have our vice but don’t let them to continually dictate your spending or savings decisions. Part of getting out of the “why am I poor” rut is learn to make mature decisions about our money. So before you make that next big purchase, step back for 10 extra seconds and ask yourself is it something you need, or something you simply want – then go from there.

Ben Huber

Hi! I'm Ben. A personal finance nerd on a mission to help DollarSprout readers make and manage financial decisions. A quoted contributor for Business News Daily,, Discover Bank, Moneyish, Student Loan Hero, Policygenius, TechRepublic, and more, I work to help others live their financial best life.

Lewis Perry 2 years, 1 month ago

I don’t go out a lot and I don’t have any expensive habits. But I’m still poor. lol

Ben Huber
Ben Huber 2 years, 15 days ago

Haha, I feel like that sometimes too. If you’re spending habits are good then you need to look into #10 more. Find a way to increase your income!

Ashley 2 years, 20 days ago

My husband and I set up a budget this past September, hands down best decision we ever made. While our budget is still a work in progress and we don’t have a lot of wiggle room yet it’s getting better and we have some plans for expanding the wiggle room. The best part is the terrifying moments of not knowing when we could pay something or robbing Peter to pay Paul have mostly disappeared. We still have to work on staying within the budget sometimes but millions of times better than before.

Ben Huber
Ben Huber 2 years, 15 days ago

That’s a huge first step. I think people are shocked at how much money they spend in certain areas and creating a budget is the easiest way to visualize how much $$$ you need just to get by each month. It’s such an eye opener. Congrats on getting one setup!

Karen 2 years, 17 days ago

Interesting read, although most of it doesn’t apply to me. I’m not sure how much of this applies to those who live in Hawaii.

Ben Huber
Ben Huber 2 years, 16 days ago

I’m not sure what you mean Karen? Most, if not all, of these items are universal in nature and shouldn’t really vary from state to state. Let me know if you have questions about any of them and I’ll be happy to help 🙂

Karen 1 year, 11 months ago

Sorry, I stand corrected. I was referring to only #7, the 50/20/30 rule. Housing costs in Hawaii are outrageous. I would love to have a house payment like yours, even up to your 50% cap of $1050. Rent alone can be $1800 for a 2 bedroom, 2 1/2 bath townhouse. Over $2000 in some areas.

Sarah 1 year, 11 months ago

In what category of the budget would you put daycare expenses for children?

Ben Huber
Ben Huber 1 year, 11 months ago

Hey Sarah!

Childcare definitely falls under the essentials category (the 50 part of the 50/20/30 rule). I know that childcare can be expensive so try and be objective and treat it as any other mandatory utility you have to pay each month. Hope this helps!

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