Why Am I Poor
Updated July 22, 2022

Why Am I Poor? How to Stop Being Poor and Broke in 11 Steps

Building Wealth

We may receive a commission if you sign up or purchase through links on this page. Here's more information.

You hate being poor, and you’re left constantly wondering, “Why am I so poor?”

This is because being poor and in poverty means that you don’t have enough to live a normal life.

It means that the chances of you living the life you want are extremely slim.

Even worse, poverty lasts generations. If you are poor, you will not have the opportunity to leave generational wealth to your children.

Why Am I Poor? 3 Reasons Why You Are Poor

There are many reasons why you may be poor, but there are three main ones that may contribute to your impoverished state.

Maybe all three of these apply to you, or maybe just one or two.

Whatever the case, it’s important for you to recognize why you are where you are.

1. You come from a disadvantaged background.

Some people are simply born with more advantages in life than others.

These advantages are called “privilege.”

Maybe you are one of those people who were born with less privilege than most, and this is why you are poor.

2. Some unfortunate tragedy struck in your life.

Did you know that the majority of bankruptcies are caused by medical expenses?

It’s true.

These people may have been doing well, but because of some debilitating disease, they became unable to work like they used to.

It’s not fair to compare these people to those who were healthy throughout most of their lives.

So maybe you are someone who had to deal with some unexpected life circumstances, such as disease or depression, and this is why you are poor.

3. You have made poor financial decisions.

It is important for you to recognize that despite the fact that you may have been dealt a sorry hand in life, you have still made some contribution to your own financial state.

It is important to acknowledge where you come from and how it may have impacted your life, but it’s even more important for you to recognize the actions you can take to overcome them.

Read on for 11 steps on how to stop being poor and broke.

11 Steps to Stop Being Poor and Broke

If you’re serious about getting out of poverty, you need to take action.

Taking the 11 steps below will get you well on your way to a decent standard of living and possibly even wealth if you implement them long enough.

1. Make a decision to not let what you can’t control control what you can control.

Yes, there may be circumstances in your life that you couldn’t control that affect where you are today financially.

However, you can control the actions you take each and every day.

Don’t let the former control the latter.

Decide everyday to be the best “you” that you can be, and you will find yourself out of poverty soon enough.

2. Figure out just how poor you are.

You can’t know how to tackle the problem if you don’t know how big the problem is.

If you haven’t done so already, it’s time to take stock of what you have and what you owe.

We use a free online website (they also have an app) to track all of our bank and credit card accounts so we know exactly where we stand.

This website is called Personal Capital.

3. Start a side hustle to increase your income and pay down debt.

Increasing your income is one of the surest ways to increase your financial status.

Here are three side hustles that you can do from home.

1. Take online surveys.

Surveys are one of the quickest ways to make money from home.

The trick is that there are only a few legit survey sites. We recommend Survey Junkie.

It’s 100% legit, and they do not send you spammy junk emails.

Their payouts are excellent, and they pay you in cash via PayPal.

Top Survey Site
Survey Junkie

Survey Junkie has an 8.9/10 rating on TrustPilot — the highest of any online survey company.

And they also have some really fun surveys.

For example, in the screenshot below you’ll see a pretty awesome music review survey that I recently did. I made $50 reviewing music!

Get Paid to Review Music Today

Now, I must tell you that not all surveys are this fun, and not all pay this well, but every once in a while you get a great one like this!

Also, it’s satisfying knowing that companies will use my opinions and inputs to make decisions about not only music, but also food, restaurants, consumer products, movies, and a lot more.

2. Get paid to watch videos online.

Believe it or not, there is a company out there that will pay you to watch videos online.

This company is called Swagbucks, and you can get a $5 sign-up bonus if you click here to sign up through our Swagbucks $5 bonus link!

3. Rent out your car.

If you don’t need your car today, then renting it out while you’re not using it could help you make some quick cash.

There is a website called Turo that acts as a private rental car listing-service. When you rent your car through Turo, your car is protected against physical damage, up to its actual cash value, for collision and most “comprehensive” causes, including theft. You are also covered by $1 million in liability insurance.

4. Look for ways to cut back on spending.

These days it’s so easy to spend more than you make.

I believe that credit cards play a huge part in this. Don’t get me wrong — I have credit cards, and I love them for the rewards points they give me — but psychologically, it’s so easy to overspend when all you have to do is hand over to the clerk a little plastic card rather than cold hard cash.

And here’s the rub: you won’t know if you have a spending problem until you know what you’re spending on!

Or maybe you do know you have a spending problem, but you aren’t quite sure which particular spending category is at the root of it.

Well, that’s why it’s important to track and monitor your spending!

I personally use Personal Capital to electronically keep track of my income, expenses, assets, and liabilities so that I can keep track of my spending habits.

5. Read books instead of watching TV or dinking around the Internet.

Researcher Thomas Corley spent five years examining the lives and habits of the rich and the poor, summarizing them in his book Rich Habits – The Daily Success Habits of Wealthy Individuals.

One of the most interesting of Corley’s findings is that a whopping 88% of rich people read for self-improvement for 30 minutes each day, compared to only 2% of poor people.

So think about this the next time you consider vegging out.

Related: 5 Reasons Why Canceling Netflix Was The Best Decision I Made This Year

Don’t have time to read (because you’re busy making money)? Well, another habit of the rich is listening to audiobooks (63% of rich vs. 5% of poor). Click here to get two free audiobooks!

6. Look for ways to advance in your career.

Like it or not, one of the quickest ways to make more money is to make more at your current job.

Even if it’s just an extra $100 a month, hey, that’s money that could be put toward getting you out of poverty.

Check out our article How I Grew My Salary by $100,000 in My 20s for ideas.

7. Stop spending time with other poor people.

Jim Rohn said we are the average of the five people we spend the most time with.

Although this isn’t some objective scientific fact, the meaning is clear: you become whom you spend time with.

If there are people in your life who bring you down, who entice you to spend more than they should, or who always have a negative attitude on life, do yourself a favor and find new friends.

8. Get cash back on items you purchase anyway.

Cash back sites and apps have saved us literally thousands of dollars over the past few years.

Here are our top 3 favorites.

Must-Have Cash Back App: Shopkick

Have you heard of the new app Shopkick?

It literally pays you to walk into stores! You don’t even have to buy anything — you will get paid simply for entering stores!

Of course, you will earn more points for actually making a purchase, but even if you’re just window shopping, you can still earn points.

Best Grocery Cash Back App: Ibotta

Ibotta is an easy-to-use app that gives you cash back at grocery and other stores!

So far, we’ve made $347.89 with Ibotta, all from pushing a few buttons on our phones and snapping pictures of our store receipts! And keep in mind that we do not have children and are only shopping for two, so if you have kids, you’ll get even more cash back!

Ibotta Review 8.13.17

Ibotta Review August 2017

Best Online Cash Back Site: Rakuten (formerly Ebates)

Rakuten is an easy-to-use website that automatically gives you cash back on online purchases!

So far, we’ve saved over $150 this year through Rakuten, just from logging in at Rakuten.com and shopping online as we normally would at sites like Macy’s, Walmart, Disney Store, JCPenney, Kohl’s, New Balance, Old Navy, Banana Republic, Land’s End, and hundreds of others.

9. Invest, even if it’s only a few dollars.

You may need money to make money, but you don’t necessarily need a lot of it.

In fact, you can start investing today with only $100.

Here’s how.

1. Invest in dividend-paying stocks.

We love dividends here at Money Done Right.

When you invest in a dividend-paying stock, you are acquiring a portion of a company that somebody else built and that thousands of other people work for, and they are giving you a portion of their profits. Blows my mind!

There are plenty of great places to open up a stock-investing account, but the one that’s getting us hot and bothered at the moment is Ally Invest.

Ally Invest is great because you can trade dividend stocks for as little as $3.95 per trade compared to $6.95 at E*TRADE and Charles Schwab.

Ally Invest has developed a pretty amazing platform, and no matter if the stock market goes up or done, we still get dividends deposited into our Ally Invest account every quarter!

2. Lend money in $25 increments.

Lending out money is one of the oldest ways to earn passive income. It’s essentially renting out your money for either people to use, and the rent you charge is known as the interest rate.

Now, in the old days, if you wanted to lend money to somebody in particular, you were taking on a pretty risky business, unless he or she put up some form of collateral. But now, thanks to Prosper, you can spread out the risk by only lending your money in $25 increments.

How does this work? Well, let’s say Borrower A needs a $25,000 loan. Instead of going to one entity, like a bank or rich person, to borrow the full $25,000 — which would be very risky to that one entity — he or she borrows $25 from 1,000 people. This scenario presents much less risk because the most any single investor could lose is only $25.

Such an arrangement would have been administratively impossible just 15 years ago. But thanks to the wonders of the Internet, it is now very possible, and Prosper is thriving for borrowers and investors alike.

3. Invest in cryptocurrencies like Bitcoin.

Unlike the other investment opportunities we mention previously that 1) are well-regulated and 2) will almost certainly pay off in the long haul, cryptocurrencies are not well-regulated, and it is possible that they will be entirely worthless someday.

That said, many people have become unlikely millionaires by investing in cryptocurrencies, and the concept of cryptocurrencies is not without merit. In any case, if you would like to receive a $10 bonus to start investing in Bitcoin and other cryptocurrencies, please click my Coinbase $10 Sign-Up Bonus Link to buy some right now (the markets are 24/7).

10. Cancel unnecessary subscriptions.

Subscriptions, especially those that go unused, can add up over time.

Thankfully, there’s an app called Cushion that will go through all your subscriptions, let you know how much you are paying for each of them every month, and cancel them with a simple text message if you’d like.

And Cushion not only keeps track of your subscriptions, but it also negotiates your monthly bills such as cable and Internet.

Cushion users have saved over $8,000,000! To learn other benefits that Cushion can offer you, check out our full-scale Cushion review.

11. Take an online self-improvement course.

It is essential that you commit to always improving yourself and expanding your knowledge if you want to reach your full money-making potential.

And thanks to the Internet, you don’t have to enroll in courses costing you thousands of dollars. You can now tap into knowledge previously reserved for those with the time and money to invest in expensive programs. It is now possible for you to get the same knowledge for a fraction of the cost and on your own schedule.

Here are some courses we recommend:

The Complete Personal Finance Course: Save, Protect, Make More

Dealing with Difficult People in Life & Work

A More Productive, Healthier, and Happier You in 13 Weeks


Logan Allec, CPA

Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

Back to top  
Notify of

Newest Most Voted
Inline Feedbacks
View all comments
Joshua Lud Kennedy
Joshua Lud Kennedy
5 years ago

God bless you abundantly. Please Sir you cant access paypal in countries like Ghana. What can l do to benefit from these links?

Rashed Miah
4 years ago

This made me motivated. Thanks