How Living Poor Can Make You Rich | St. Johns Bank

In our culture, having expensive things, driving nice cars or owning a big house signals your success to others. But this appearance might not be what you think. Many people live above their means. Wealthy people often live paycheck to paycheck to afford their lifestyle, which is not a good financial place to be in the long term.

Instead, try intentionally living with less to become wealthy. If you have money, don’t spend it on extravagance. And if you’re still building wealth and savings for yourself, make frugal lifestyle decisions now.

Here are some tips on how to live poor to become rich:

Live below your means. Living poor to become rich doesn’t mean sacrificing every comfort. Instead, it involves understanding wants and needs and living slightly below your means instead of at or above them. Cut unnecessary expenses by canceling subscriptions and impulse purchases. Use those savings to build your savings.

Budget wisely. It should go without saying, but you need a budget. Track your spending, bills and savings and make every effort to stay within budget. You can also set monthly, yearly or long-term financial goals to stay motivated to live within your budget and means. There are many ways to start a budget: spreadsheets, old-school pen and paper, apps, or calendars—do whatever works best for you.

Pay down debt. One thing that will keep you in a financial hole is debt. While you could make the minimum monthly payments and keep living a comfortable life, it’s best to take action and put energy towards paying it off as quickly as possible for financial freedom. Start by paying the lowest debts first and work to the highest until you’re done. To do this, you will need to sacrifice other luxuries, like eating out or shopping, but it will be worth it.

Change your mindset. Maybe the most critical and challenging change when taking the strategy of “living poor” is shifting your mindset. Let go of the materialistic way of living and understand that expensive things do not prove wealth, nor should that matter! Consider everything to be grateful for rather than wanting more. A positive mindset can empower you to make better financial decisions and allow you to live in the present.

Want to learn more about saving, budgeting and financial planning? Contact us today to get started on your financial journey.