How to escape poverty

Jinster81

Jinster81

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Hi all. I don't need another lecture on the fact that I live in one of richest and safest place in the world and need to count my blessings. I do, just not that often.

I work full time and still struggling with financial issues. Any thoughts on how to escape this vicious cycle of poverty? Can we have a thread on tips to escape this disease?

My inputs:

1. Never finance/lease a car
2. Never upgrade i-device every time a new one comes out
3. ONE hobby is enough
4. Eating out should be limited
5. Be childfree.
 
Dont try and measure up to those with inheritance, luck or even dilligence. Drop the mortgage and live like youre here only once. Moneys no good to you dead.

If you dont like the income your job provides an improvement wont be immediate but that can be changed.

Good sig, too.
 
Jinster81 said:
Hi all. I don't need another lecture on the fact that I live in one of richest and safest place in the world and need to count my blessings. I do, just not that often.

I work full time and still struggling with financial issues. Any thoughts on how to escape this vicious cycle of poverty? Can we have a thread on tips to escape this disease?

My inputs:

1. Never finance/lease a car
2. Never upgrade i-device every time a new one comes out
3. ONE hobby is enough
4. Eating out should be limited
5. Be childfree.
Click to expand...
Sometimes financing a car can be smart eg. I have a friend who was spending 600 per mo on a old beater for gas plus constant repairs he bought a new Cruze for 300 per mo 0% financing and now spends 200 per month on gas and has no repairs and warranty for 5 yrs.
Eating out is a big one and looking at your monthly expenses, cell phone, cable etc. those things are huge over a year.
 
It almost sounds cliche at this point, but: live within your means. Financial issues rarely have to do with how much money you make, but rather how much money you spend.

Another expense that adds up more than most people think: that $5+ you spend at Starbucks every damn morning, getting your triple-frappe-latte-cino.
 
Create a budget spreadsheet - if I didn't have mine there's no way I would have been able to get into my first house many moons ago. Plus, you can really see where you're throwing money away and it's a good idea to budget yourself a weekly/monthly allowance for that miscellaneous "whatever" costs (because you DO need to be able to have spending money).

Several of my friends have gotten set up with the same spreadsheet I use and find it indispensable. You can see, without a doubt, whether you will be able to pay that bill two months away or if you need to make a few changes to your spending first. I also have a weekly amount in there for groceries, vacation fund, extra toward the mortgage, etc. You can play with the numbers and see where it will put you next month, 6 months from now, and even on Dec. 31st. Keep going if you want, but you just need to make sure that the budgeted amounts are realistic. You replace these estimates with actual values once the event has occurred.

Let me know if you're interested. :)
 
Jinster81 said:
Hi all. I don't need another lecture on the fact that I live in one of richest and safest place in the world and need to count my blessings. I do, just not that often.

I work full time and still struggling with financial issues. Any thoughts on how to escape this vicious cycle of poverty? Can we have a thread on tips to escape this disease?

My inputs:

1. Never finance/lease a car
2. Never upgrade i-device every time a new one comes out
3. ONE hobby is enough
4. Eating out should be limited
5. Be childfree.
Click to expand...

Maybe a career change is needed. What do you do for a living?

Sent from my A500 using Tapatalk 2
 
Separate needs from wants. A lot of times, being broke has little to do with income and more to do with lifestyle choices. Prioritize the wants and focus on only the top few. Delay purchases and save for them, no credit.
 
Understand the difference between price and value. The cheapest price for something, isn't always the best value. If you are going to buy something, it's often (usually?) better to spend just a little bit more, in order to get something better that should last for a long time, instead of something cheap that will break next week. But once you've bought something, take care of it so that it WILL last a long time - and then keep it for that long time so that you don't pay to replace it sooner than you have to.
 
Most of this is common knowledge but i thought id share it with people :)

BUDGETING
Just like when i diet, i keep track of EVERYTHING i spend whehter it be by cash, or by credit or debit card.

When you track it all, theres are some "useless things" that you'll feel bad buying because you know you're budgeting.

Then at the end of the week you can do 'enveloppe budgeting'
What it is is giving yourself an allowance for different aspects of your expenditure aka: Gas, groceries, entertainment, restaurant/fast food, bill payment, etc.
So when your paycheck comes in, you attribute everything to different "enveloppes"

CREDIT
Avoid credit card recurring balances. This means that you makes sure that every month you pay it out IN FULLLL BEFORE THE DUE DATE. Minimum payments are..well..the minimum. That will keep you out of past due status and make sure that you dont get huge hits on your credit score.
My personal trick is to have my limit not surpass my monthly income (or you could have your limit be your "enveloppe limit") therefore you make sure its paid in full.
If you've got that easily covered you could get a card with points and perks, depending on your spending, it might help you make save some money, help pay for a trip here and there, etc.

GAS
Its somewhat of a given, if you can, and commute by car, try to see if anyone at your workplace lives near you. Carpooling will make you save on gas money and may make the commute more pleasant for you! If your work in an environment with A LOT of people you might wanna try this:
http://www.smartcommute.ca/en/home
I work at Meadowvale RBC headquarters and for a few months i did it (until my schedule changed) but the extra 20$ a week = 80 after a month = 960$ after a year... very mucho fun
Of course its a given that you should go easy on the gas pedal, and make sure all the proper maintenance is done on your car as a smoother engine will drink less gas in most cases

TAX-BREAKS
Who likes paying taxes here?
*crickets*
A few quick tips, contribute to an RRSP.
I understand that its something that you don't always wanna do since you can't withdraw it easily (aka without $$$ penalties) but its definitely worth it. The money will work invested in it will work for you in 2 ways,
- It reduces the amount that you're taxed on => less taxes to pay right now
- and at the same time you're saving for your future into an investment that, on the long-term, will give you more money for what you put into it!
If you have kids, same thiing but with an RESP, it doesnt have to be something else, but if each parent puts a dollar a day until the kid gets to college and university, we're talking about $12,000 without even including interest that would accumulate on it.
If you've got enough money to invest on the side, put it in a Tax-Free Savings Account (TFSA). As it says anything you invest in this, and any dividends, interest or what not is not taxable.

hmmm

thats about what i can come up with right now and i hope this helps :)
 
My 2 cents, or at least that is what I am trying to do to escape that same cycle.

Budget: in addition to what was said already, use a free software such as gnu cash. For one quarter of the year input all of your transactions then start reporting on your expenses, income and if you have any investment. Using this strong tool you will have intelligent data about your financial behaviour. Based on those reports you can make informed decisions of reasonable and realistic cut backs.

Cut backs: start gradually and get used to it first before cutting more. If you cut all one shot you will feel deprived for a while and will be prone to make it up in one big purchase to reward yourself.

Credit: live within your means, it is great that you have enough credit for any unforeseen circumstances, otherwise do not use credit cards unless you can pay that transaction in full. Get familiar with the credit cards cycles since you can extend a payment period if you purchase in the right time within the cycle without paying any interest.

Attitude: learn to be content with the bare minimum or close to it, if you have enough disposable income and go for vacations in the caribbean then great and if not, then there is nothing wrong with just chilling and visiting the local community swimming pool. If you master not wanting more then the little will be plenty.

A friend of mine makes $200K+ a year yet due to his larger than needed house and unnecessary expenses he always feels poor and lives without joy, another friend makes $40k/yr yet he always seems to travel more and enjoy life more. Rich or poor, is only a matter of perspective.
 
Buy second hand, Kijiji and yard sales are your friends. Learn how to fix things, Youtube has thousands of DIY videos. I learned how to fix a toilet, patch drywall, build a workbench, recharge my car's AC, change a serpentine belt, replace brake rotors and pads and many other small jobs. I've saved thousands of dollars by not paying pros to do the work and my work is just as good if not better since I can take my time. Don't smoke and drink moderately. Don't do drugs, they are very expensive, a friend of mine got into financial trouble because of this. Don't go to bars or clubs every weekend. Don't eat out too often. Learn how to cook or at least prepare your own meals. Learn how to sew with a needle and thread, a torn seam in a shirt does not make it garbage. My one vice of course are my bikes but I like old stuff so it's not very costly.
 
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Hey OP,

Sorry to hear about your situation.

One of the most over-looked things is eating. Eating out every meal for 7 days straight is a good way to throw away 300 bucks on a weekly basis. Even eating out once a day adds up. RetroGrouch's suggestion is a good one. My buddy made just as much money buying macs, upgrading them, and reselling than when he was on an hourly wage. He basically makes the same amount of money, but working way less hours (if you could even really call that "working).

Sorry for the plug, but some of these might help. I wrote it with the student in mind, but really, anyone who's trying to be frugal could learn from it: it's the first link. (I couldn't link it 'cause the forum censored a word)

But more than anything, work on your social skills and english (if that isn't a strong point of yours). Being able to shoot the **** goes a really long way imo. So many more opportunities become available and I think that's what screws up a lot of asian people (including some of my friends).

Lastly, work with what you have. I know so many pretty girls who could be making a killing serving or bartending, but instead they're working retail making peanuts. And if you're not good-looking, use your mind to your advantage - find something that you're good at (even if you don't enjoy doing it) and make the money.

One thing I do for myself is that I have a "rainy day fund". It's a fund that I'll probably never need to touch, but the technique's helped a lot of my friends out. Put a little bit away every paycheque for surprise expenses. If, at the end of the year, you manage not to touch it, treat yourself to a vacation or a bit-ticket purchase that and put a third away from that for next year. Your "rainy day fund" will always keep increasing and it's very easy to stay motivated since success leads to such a great reward/reinforcement.

The old adage "do what you love and the money will follow" is true, but I wouldn't say that it's always good advice, practical, or even worth following. If you're considering changing industries, gtam or redflagdeals is a great place to start if you just want cliffs on an industry

Sorry for the long post...I hope at least some of it's useful.
 
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Scavenge, people throw out lots of useful items. I've never paid for patio furniture, people would rather get new chairs than clean them. I built my closet shelves out of new material a neighbour didn't need. Leftover lumber gets tossed to the curb that can be used to make a gate or bicycle rack. Someone threw away several nearly new stainless steel shelves so I scooped them and used them in kitchen and bathroom cabinets.
 
RetroGrouch said:
Scavenge, people throw out lots of useful items. I've never paid for patio furniture, people would rather get new chairs than clean them. I built my closet shelves out of new material a neighbour didn't need. Leftover lumber gets tossed to the curb that can be used to make a gate or bicycle rack. Someone threw away several nearly new stainless steel shelves so I scooped them and used them in kitchen and bathroom cabinets.
Click to expand...
TRUTH. Almost all of our furniture is from a garage sale or thrown away. We used to be pretty poor, so my dad sanded them down, re-varnished them, and re-painted instead of buying new furniture when we moved. We actually get guests/visitors asking where it's from whenever we have people over. They're always shocked when they find out that it used to be garbage.
 
move out to Alberta lots of jobs here that pays $20/hour + easily and lots of overtime on top of that. If you're big and strong you can make six figures easily doing brainless manual labour.

That's what I did after living pay cheque to pay cheque and my credit card slowly climbing higher and higher while having a mortgage.

I've got at least 20 family members tonnes of friends in Toronto and 0 in Alberta but I figured I've got to do something to break the cycle or I'd be in major debt trouble. When I lived in Toronto I never ate out, lived frugally never used a/c in summer always turned my thermostat down before I leave for work and all my furnitures were garge sales or handed down to me for free.

Now in Alberta I always eat out, making 3 times more what I made annually in the last 6 years in Toronto. My credit card is all paid off I've accelerated my mortgage payments 3 times the rate to pay it off and I've grown some muscles lol. Never worked manual labour before but I'm loving the job it's stress free as long you meet their productivity standards they'll leave you alone.
 
stop spending money on **** you don't need. =P
 
Check the grocery store flyers every week. Go to the store that has the most stuff you need on sale. You can save a good chuck of cash doing this. For the most part I get as much produce as I can at the farmer's market then get the rest at Food Basics, No Frills or Price Chopper.
 
Marry a banker.My needs and wants became very clear.Bottom line is....spend less!
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