Poor People Rules

Poor People Rules

Personal finance can be complex, often obscured by myths and misconceptions that can perpetuate financial hardship. This blog post aims to shed light on some of these beliefs.

Based on research, academic papers, books, and studies on the mindset and beliefs of broke or poor people, the following would be hypothetical “Poor People Rules” that they follow either consciously or subconsciously to keep them from ever being wealthy or successful at personal finance.

28 Unwritten Rules Of Being Poor:

  1. Always spend before saving.
  2. Never invest in self-education.
  3. Avoid financial literacy at all costs.
  4. Credit cards are free money.
  5. Buying items on sale is saving money, regardless of need.
  6. Ignore your debts, and they will disappear.
  7. Never plan or budget for your spending.
  8. Only the wealthy can invest.
  9. Big houses and flashy cars are a sign of success.
  10. Don’t have an emergency fund.
  11. Stick to low-paying jobs and avoid career progression.
  12. Avoid discussions about money.
  13. A rise in income should immediately increase lifestyle expenses.
  14. Financial success is due to luck.
  15. Keep all your money in a checking account.
  16. Never negotiate salary or prices.
  17. The stock market is akin to gambling.
  18. All debt is bad debt.
  19. Avoid new income streams (side gigs, passive income).
  20. Rich people are evil or greedy.
  21. It’s impossible to become wealthy from a regular job.
  22. Financial problems are solved by winning the lottery.
  23. Always buy new instead of used.
  24. Living paycheck to paycheck is normal.
  25. Education and degrees are not worth the investment.
  26. Saving for retirement isn’t a priority.
  27. Insurance is a waste of money.
  28. Risk is always bad. Avoid all risks.

Navigating the complex world of personal finance can sometimes feel like stumbling through complex financial decisions without a map for many people. Misunderstood notions and myths often muddle their understanding of both the math and psychology of money, keeping them in perpetual financial hardship. The above widely held beliefs, or ‘rules,’ may covertly undermine your fiscal growth. By dissecting these notions, you will gain a newfound perspective on managing your money more effectively. Keep reading to uncover the truth behind these misconceptions, learn how they might hold you back, and discover how to rewrite your financial narrative toward abundance and security. So, let’s embark on this enlightening journey together and turn your financial destiny around. Let’s debunk these rules and explore their impact on financial well-being.

Always Spend Before Saving

The idea that one should enjoy their hard-earned money immediately often leads to a lack of savings. This can create a cycle of living paycheck-to-paycheck, leaving no room for financial growth or security. You must pay yourself first, not buy buying something but depositing money in a savings or investing account, or you will never have anything to show for all your hard work.

Never Invest in Self-Education

Not investing in self-education can significantly limit your earning potential and professional opportunities. This neglects the potential value new skills and knowledge can bring to your career and personal life.

Avoid Financial Literacy at All Costs

By avoiding financial literacy, individuals are less equipped to manage their finances effectively. Understanding financial concepts and products is essential for long-term financial health.

Credit Cards Are Free Money

Thinking of credit cards as free money leads to irresponsible spending and debt accumulation. Credit should be used wisely and responsibly, with an understanding that it must be paid back. Compound interest working against you is a dangerous trap.

Buying Items on Sale is Saving Money, Regardless of Need

The misconception that all sales are bargains can lead to unnecessary spending. Purchasing items based on need and value is essential, not just because they’re on sale.

Ignore Your Debts, and They Will Disappear

Ignoring debts doesn’t make them go away. Instead, it can lead to growing interest, increased stress, and long-term financial problems. Escaping consumer debt is the first step in personal financial success.

Never Plan or Budget for Your Spending

Without a budget or a spending plan, losing track of your expenses and overspending is easy. Planning and tracking your expenses is crucial in controlling your finances.

Only the Wealthy Can Invest

Believing that investment is only for the wealthy is a significant barrier to financial growth. There are many accessible and affordable investment opportunities for individuals at all income levels.

Big Houses and Flashy Cars are a Sign of Success

Equating material possessions with success can lead to unnecessary financial strain. True financial success is determined by wealth accumulation, not just outward displays of wealth.

Don’t Have an Emergency Fund

Lack of an emergency fund can leave you financially vulnerable in unexpected situations. Setting aside funds to handle emergencies without going into debt is crucial.

Stick to Low-Paying Jobs and Avoid Career Progression

Believing you’re stuck in low-paying jobs without room for advancement can limit your earning potential. It’s vital to seek career growth opportunities and strive for higher earning potential.

Avoid Discussions About Money

Avoiding money conversations can lead to a lack of financial knowledge and understanding. Open and honest discussions about money are essential for financial literacy and success.

A Rise in Income Should Immediately Increase Lifestyle Expenses

If lifestyle expenses increase with every income rise, there’s little room left for saving and investment. Instead, consider saving or investing a portion of any income increases.

Financial Success Is Due to Luck

Financial success comes from careful planning, intelligent decisions, and hard work. Relying on luck for financial well-being is a precarious strategy.

Keep All Your Money in a Checking Account

Keeping all money in a checking account means missing out on potential growth through interest or investments. It’s essential to diversify financial holdings for maximum growth potential.

Never Negotiate Salary or Prices

Negotiation is a crucial aspect of financial growth. By never negotiating, you could leave money on the table, both in your career and everyday purchases.

The Stock Market is Akin to Gambling

When approached strategically and with understanding, the stock market is investing, not gambling. This misconception can prevent individuals from benefiting from potential market gains.

All Debt is Bad Debt

Not all debt is bad. While managing and minimizing unnecessary debt is crucial, some debts, like a mortgage or student loans, can be part of a healthy financial plan.

Avoid New Income Streams (Side Gigs, Passive Income)

Diversified income streams can increase financial security and growth. Avoiding these opportunities can limit your income potential.

Rich People are Evil or Greedy

This stereotype can create a negative association with wealth and deter individuals from pursuing financial success. Wealth accumulation doesn’t equate to greed or evil but can result from hard work, intelligent decisions, and perseverance. The self-made rich become that way by building businesses, products, and services that people need or investing in the businesses that do it.

It’s Impossible to Become Wealthy from a Regular Job

This belief limits the potential to build wealth. With proper financial management and planning, even average earners can accumulate wealth over time.

Financial Problems are Solved by Winning the Lottery

Relying on lottery wins for financial security is an unstable and unrealistic strategy. A solid financial plan and consistent savings are a more reliable path to financial security. Lotteries are a tax on hope and the inability to do the math.

Always Buy New Instead of Used

This rule ignores the value of second-hand goods, which can be a cost-effective alternative to buying new ones. Choosing used items can result in significant savings. The most meaningful example is buying a used car over a new car. Focus on the value proposition when spending money on anything.

Living Paycheck to Paycheck is Normal

This belief normalizes financial instability. While it may be common, it’s not a healthy or desirable financial situation. Hand-to-mouth living is stressful and must be overcome by higher earnings, lower spending, or a combination of both.

Education and Degrees are Not Worth the Investment

The value of education extends beyond the initial cost. Degrees can open doors to higher-paying jobs and career opportunities, offering long-term financial benefits. Most of the wealthy have some level of college education, and most went to private schools as children.

Saving for Retirement Isn’t a Priority

Delaying retirement savings can lead to financial insecurity in later life. It’s never too early to start planning and saving for retirement.

Insurance is a Waste of Money

Seeing insurance as a waste overlooks its role in financial protection. Insurance can offer financial security in the face of unexpected life events.

Risk is Always Bad. Avoid All Risks

While it’s essential to manage risk, avoiding all risks can limit financial growth. Taking calculated risks can lead to significant financial rewards.

Key Takeaways

  1. Financial liberation demands prioritization of savings before splurging.
  2. Continuous learning and self-improvement can significantly elevate your earning capacity.
  3. Familiarizing oneself with fiscal concepts is pivotal for sound financial health.
  4. Credit should be treated as repayment obligations, not as bonus capital.
  5. Economizing involves mindful purchases based on necessity rather than the allure of discounts.
  6. Evading debt payments exacerbates financial woes rather than alleviating them.
  7. Structured spending through budgeting empowers you to control your fiscal journey.
  8. Wealth accumulation isn’t exclusive to the affluent – investment opportunities are accessible to all.
  9. Materialistic exhibits of affluence don’t equate to genuine fiscal success.
  10. Having a financial cushion in the form of an emergency fund is a vital safeguard against unpredicted expenses.


The essence of the rules in this article lies in highlighting the misconceptions that can impede financial prosperity. It highlights the value of financial discipline and the potential pitfalls of ignoring sound financial practices. A common thread throughout these rules is the importance of informed, proactive steps in managing personal finances through conscious saving, constant learning, and strategic investment. By comprehending these principles, one can shake off the trap of financial stagnation and step into a world you create of fiscal stability and abundance. Ultimately, the road to wealth isn’t paved with luck or shortcuts but with education, discipline, and a mindset of growth and resilience.

By personally understanding and debunking these “Poor People Rules,” people can step towards improved financial literacy, empowering individuals to make more informed decisions and break free from the cycle of financial hardship.