Perpetuating Myths about Poverty

March 28, 2011

I’ve said it before, I was not the brightest financial light in the bunch when I was younger. Oddly enough, I come from a wonderful upbringing in a home where financial responsibility was expected and demonstrated, if not discussed openly. So, according to the philosophy that well-to-do and financially savvy parents beget children with the same financial smarts, I should have known better. But I didn’t.

Yes, balancing a checkbook and making a dollar stretch were two skills I was taught and which I have carried with me ever since. However, the wise usage of credit what not taught, most likely because I came of age at about the same time as the explosion of the consumer credit card in the 1980s. Before that, receiving a credit card while in college was not only uncommon, it was next to impossible.

So, when I pulled my first credit card offer from my apartment’s mailbox, the only thing I saw was the $2,000 credit limit. To me, that was like shouting, $2,000 of “free money.” WMaxing Out Credit Card was NOT Goodithin 36 hours of receiving that card in the mail, I had maxed it out and would, for a decade thereafter, carry a balance and pay interest (initially to the tune of 19% APR or more).

It took years to dig out of the credit card hole. In the meantime, I dabbled in a couple of payday loans, bounced a number of checks, and continually treated my savings account as a “deferred spending” account rather than an emergency fund.

I share this lengthy history to make the point that my troubles where not actually from a lack of education or from ignorance. I quickly learned how credit cards worked, but I continued to rely heavily upon them to subsidize the lifestyle I felt I deserved. What kept me in the cycle of consumer debt was my attitude, what I termed PovertyThink in a recent blog. I had conditioned myself to believe that this was the only way to look at my finances.

So here is a synopsis of a few of the myths that lead many of us to subsidize our unsustainable lifestyles through credit, thus keeping us from building true financial net worth (aka wealth):

  1. We prefer to blame others rather than take responsibility for our own financial mistakes. Banks and creditors, in particular, are the major targets of our frustration. They, after all, charge ridiculous fees for bounced checks and late payments, right?
  2. We seem to believe that lifestyles, income and effort should all be fair and proportional. That is to say, the harder we work, the more money we should earn and/or the more money we “deserve” to spend. We compare our efforts and lifestyles to those of our friends, neighbors and acquaintances, and say to ourselves, “I work just as hard as they do, so I deserve to live as well as they do.” For example, I saw friends and classmates back in college driving new(er) cars, purchasing season ski lift passes, and living in expensive condos. Some might call it impatience, but I felt I worked just as hard as they did (harder, I would argue, since I was an early-morning janitor at my school’s science center), and that I was consequently entitled to anything they had just as much as they were. Credit cards allowed me to initially satisfy that feeling but lead to long-term troubles.
  3. We choose immediate gratification over long-term security. “Living in the now” may be a popular catch phrase in movies and among a few philosopher wannabes, but it’s a terrible idea for financial security. Of course we can enjoy life each day, but this catch phrase ignores the absolute necessity to prepare ourselves for long-term financial survival. Spending money now that should be going toward savings and investments means we’re spending tomorrow’s security for today’s gratification.

Taking Personal Responsibility for Our Finances MUST Be Our First StepUntil we take personal financial responsibility for our own choices, stop expecting life (and especially financial affairs) to be perfectly fair, and we learn to delay gratification, we are destined for financial insignificance. We do not find long-term satisfaction in living paycheck-to-paycheck. We’ll find no honor in unearned positions or possessions. We’ll find no lasting peace of mind in expenditures for the pleasures of today.

In summary, for those who continue to blame others, demand financial equality (which is not the same as opportunity), and live only for today, the future may only bring more disappointment, greater financial inequality, and the dreariness of debt and financial ruin.

If you or someone you know is stuck in this rut of PovertyThink, it’s time to reconsider your situation. Do some reading about how financially successful people accomplished their goals, and follow their examples. Here’s a nice site to see read some real life financial success stories (without all the blinding glitz and false glamour of the lottery and get-rich-quick sites): Get Rich Slowly.

Have a fantastic day!


Todd Christensen
Director of Education
Facebook: MoneyDay2Day
Twitter: Day2DayMoney

Published in: on March 28, 2011 at 1:33 pm  Leave a Comment  

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