Embrace Being Poor

Embrace Poverty
Now I am saying this tongue-in-cheek because the title is a bit hyperbolic but there is something to be said about embracing your financial situation. In life we like to put on a face or display that we are doing better than we are. Social media is a big culprit for this. We want a nice car, fancy phone, luxury clothes, dine at new restaurants and travel to showcase how well we are doing in life. But some of us are lying. We want elevated status when we cannot afford it. I see Tesla Model 3s in my community parked in front of a townhome. There is nothing wrong with wanting a Tesla, I would love one. But a model 3 averaging around $56,000 I am sure it is stretching the budget. Maybe that is their priority in life and that makes them happy, but I would assume it would be financially difficult.  

There is a story from Matt LeBlanc (Joey Tribbiani on Friends) where he runs into a "Friends" fan that was 13 or 14 years old and saw him on the street and said: "Oh my god, You're Joey's dad!" LeBlanc said he responded like a stereotypical old man, saying, "Scram!" to the kid. Matt LeBlanc told the story on Live Kelly and Mark and joked how he embraced his age when he said “Scram”. Matt realizes he is old and is okay playing the part. This may seem off topic of “Embrace Being Poor” but he is embracing his age, as he has aged. People get old and people can be poor. It's okay.

Embracing being poor can be embarrassing especially if we are not exactly where we would like to be in our lives. But it can be liberating to let go of other’s expectations and just be. Own the fact that we are poor but we are doing something about it. There may be 13 and 14 year old that think Matt Leblanc is still in his 20s but it's okay that he is not.

Are you Poor?
Now you may be reading this and think, oh this post isn’t about me, I am not poor. And therein lies the problem. Most poor people don’t think they are poor (probably why they are poor in the first place). You might be well off, but it's good to reflect nonetheless. There was a poll about bad drivers and they polled people and asked if they believed they were an above average driver. 93% said they were above average, which obviously is not statistically possible. Some of the drivers do not realize that they are actually below average. Such is the same of those struggling financially. Most wouldn’t have their financial struggles if they knew or lived like they were poor.

You’re Poor
This subject always makes me think of the Seinfeld episode where George gets a wig. George loves the new image of himself and he starts to deny the fact that he is bald which infuriates Elaine. This eventually comes to a head with Elaine yelling “You’re Bald!”. This is similar to poor people where they are in denial of their financial position. They have their “wig” that makes them feel good whether it be expensive clothes or a nice car, but sometimes they just need an Elaine to yell at them, telling them they are Poor.

What Exactly is Poor
So, what would we define as poor? It will depend on who you ask, but I would say, if you have personal debt (credit cards, line of credit) you are probably poor. If your net worth is in the negative (ignoring student loans and mortgage) you are probably poor. If you are living paycheck to paycheck or netting a negative budget (going into the hole) you are probably poor.

Vehicle
Embrace that beater of a car that barely works that you bought for $2000. It's okay that the car is not fancy, you're poor and just need to go from A to B. Even Tesla's only go from A to B. Have pride that you are saving money without a car payment each month unlike the millions that have auto loans with high interest. Old clunkers have an added benefit of having cheaper insurance.

You might say, “But the cost of repairing a beater is so much money”. True, and I understand the sediment especially if you have no extra money for an emergency repair and a new financed vehicle seems like the only option. But if you add up your car payments each year I bet you would spend less money on repairing an old car then you would on the monthly payments. For example: say your car payment was $500 a month (average car payment) that is $6000 a year which would be an insane amount of repairs to have in a year. Even if you did have $6,000 of repairs in a year, you probably wouldn’t the next year which means you will be $6000 up in savings compared to $12,000 spent over two years.

You could even try to go without a vehicle all together if it would fit into your life, to save on gas, insurance and car payments/cost of a vehicle. Vehicles are money pits and they only go down in value over time while costing a fortune in maintenance fees. Poor people love crappy cars.

Phone
No one needs the latest iPhone. It is a luxury and one that is completely unnecessary. They have flagship phones like the “Max” or “Pro”. The mid range phones which are just normally the standard edition and then there are the iPhone SE or Pixel something A. These cheap $200 phones still make calls, have the same apps and do the same thing for 1/8th the price. Even better, you can buy off Marketplace if you are patient enough. A phone is a phone.

Also this applies to phone plans. There is no need to ever be paying more than $50 a month for a phone plan. Every single plan pretty much has unlimited talk and text and most more data gigs than you will ever need. Also why do you need so much data? You work in a location with WiFi (No data needed) then you go home where you have WiFi. How much data are you using up on your 20 - 30 minute commute? I personally am lucky if I use more than 2 gigs a month. You might be able to get by without any data whatsoever around saving $20 a month. Having a high phone plan can be a silent drain on your earning potential and a quick phone call can save you hundreds a year.

Housing
You don’t need an entire house if you are poor. You don’t need an entire basement suite if you are single and poor. Being poor means you are going to have crappy accommodation including living with your parents. Living at home can be a fantastic way to save money. Cutting out 35% of your budget in one decision. Housing is the largest section of anyone's budget making it a logical first place to look for savings. Renting is inherently wasteful since it goes straight into your costs of existence and none of the value is retained. The more you spend on rent, the less you have for food, entertainment and most importantly savings. Rent can vary widely within a city and if you are going to embrace being poor for one aspect of your life, this would be the only to do. If you are single you could move from a basement suite to renting a single room in a house.

Living in a small cramped space is totally fine if you are poor. Sharing a house with roommates is completely normal if you are financially strapped and living with your parents is totally okay if you have a plan and a goal to get out of debt and to become financially independent. There is no reason to be embarrassed if you are working on, and actively improving yourself.

Food
Everyone needs food, but not everyone needs $50 steaks. Costs per meal can vary from $1 a meal to $50 a meal. It's nice to treat yourself to eating out on occasion or for a special event but when it happens 5+ a week it is just reckless and not embracing your poverty. Poor people shouldn’t and ought not to eat out at all. Eating out is a luxury and a treat and each meal eating out costs you multiple times more than it would cost to make at home. Living on rice and beans might be extreme and not realistic for every meal, but it can feed you for around 49 cents a meal. If you spend $20 on UberEats just remember you could have afforded 40 meals (rice and beans) for the cost of the one meal delivered to you. Pasta, ramen, chickpeas, frozen vegetables, oats, eggs, lentils, peanut butter, bread, potatoes and flour are all examples of food that are more affordable. These should lower your cost per meal to below $5 per meal. Poor people pack their lunches, and don’t eat out and that's okay. Poor people eat all their left overs and don’t waste food. Poor people buy in bulk and cook in bulk. Eating the same meal 3 or 4 times in a row, kind of boring and repetitive but it saves money.

Entertainment
Poor people don’t go to movies, shows or concerts. They stream a TV show at home using their families logins so they don’t have to pay for the subscription. They go to the Library to borrow their books, movies and video games. They are not going to Indigo to buy a brand new book. They are not buying a video game at full price, they are buying used on marketplace.

Clothing
Poor people do not care about name brands. They will shop at low cost stores such as Walmart proudly knowing they are getting a t-shirt for $4. They have a limited wardrobe where they rotate between a handful of favorites. They never buy anything full price and they are not ashamed to shop at a secondhand store. They use Facebook buy nothing groups and clothing swaps for free clothes and are okay with being seen in the same clothes week to week.

Beverages
The human body only needs water. That's it. And luckily for you water is literally free, pretty much everywhere. No one needs a soda pop. No one needs a, “A venti pumpkin spice latte with eight shots of espresso, seven pumps of pumpkin sauce, and one pump of maple pecan sauce”. Now, don’t get me wrong, that sounds delicious but that is a luxury that poor people cannot afford. $5 drink everyday, 5 times a week, is $100 a month just on beverages. Getting a burger and fries, there is no law demanding you get a soda with your meal. Believe it or not, even with the combo discount, it's still cheaper to just drink water. Poor people love water. Tap water is clean and drinkable and you can buy a filter if you are really sketched out by tap water. Another bonus is that water is the best, most hydrating beverage for your body.

An occasional splurge won’t break the bank, but lifestyle needs to fit within one's financial situation. We all want more. We want to be younger, more attractive and yes, more wealthy, but it's okay if we are not. It's okay to be poor. The sooner we embrace that fact, the sooner we can do something about it.

If you found this helpful and would like help budgeting or investing please email me at taylormckeecoaching@gmail.com