“Survival is based on spending money on things that you need, not things you don’t need because some things can wait until a season of prosperity.” A lot of poor people spend more than what they earn. Instead of keeping things simple and spend less, they end up overspending hence they end up suffering from lifestyle inflation?
What is Lifestyle Inflation? Lifestyle inflation refers to an increase in spending when an individual’s income goes up. Lifestyle inflation tends to become greater every time an individual gets a raise and can make it difficult to get out of debt, for instance, If you’ve been given a 10% raise, the natural thing to do is to add it you’re spending. Increasing your quality of life when you can’t afford to. Instead, use that extra 10% to pay off your debt or find a way to invest it
Financial wisdom is something that lacks amongst the poor, in this article am going to share with you 5 various ways in which the poor waste their money, the point of this article is not to make you feel wrong about the way you spend your money. It’s to make you think about how you spend your money. When you know what you can afford, you may find yourself climbing up the socioeconomic ladder.
#1 the Use of Credit Cards
Research has shown that people are often willing to pay double the price for an item when using a credit card as opposed to cash because it is less psychologically painful to swipe a credit card than it is to physically hand over cash. Credit can psychologically stimulate the desire to spend money.
#2 Impulse Buying
In most supermarkets, stores and many retail outlets you often find candy bars, lighters and many other stuff on the checkout lane, These are known as impulse purchases and are placed strategically (and sometimes with a higher price than similar things in the store) so you buy them on an impulse, impulse purchases are one of the most significant ways the poor waste their money on, and should be avoided by all means.
#3 Beautification
Beauty is everyone’s desire, but, unfortunately, most poor people feel that the rich look more attractive, especially women, they are in a constant believe that this is true because rich women can afford to dye their hair regularly, wear the best makeup, and spend hours in the salon but in reality this is not true, most rich women don’t do this. If you meet a female CEO at a local business, you may find she has very little makeup on and she’s not wearing any manicure.
The myth that poor people believe when it comes to the rich and how they spend their money, looking beautiful is based on the way celebrities look and not the typical entrepreneur woman. And because of such a mentality, they end up spending more than they earn, just to keep up with appearances.
Because most poor people have no knowledge and understanding of the key principles of success they strongly believe that what’s holding them back is spiritual and only fortune-tellers and Psychics can guide them on which path they should take, but it is unfortunate, that many people are scammers and just looking to make a few quick dollars at their expense. Most Poor people fail to accept the fact that one’s future depends on the life choices one makes and if one wants a good prospect they need to make good choices.
#5 Gambling
Poor people spend exponentially more on scratch tickets, on slots and casinos than everybody else. They all dream of winning big. The average person in Australia loses just under $1000 per year to gambling. 70% of the UK population plays the lottery regularly.
A 2012 study at Yale University found that “Those in the lowest fifth in terms of socioeconomic status had the “highest rate of lottery gambling (61%) and the highest mean level of days gambled in the past year (26.1 days).” This is indeed a habit that you should restrain from for it is the main reason why most poor people lose and waste their money,.
