During the time that I've been writing this blog, one thing that I have noticed is the difference in attitudes between those who are on their way to financial success, and those who just seem to be mired in debt and despair. They have a distinct difference is an attitude and outlook.
Those on the road to success believe that anything is possible. They know they can pay off their debts, save, and live a bright future. They plan for that future, they work hard, and they make it happen. They have a can do attitude.
Then there are those who believe that improving your situation is impossible without help, that the little guy just can't get ahead. They believe that everyone else has some advantage over them. Others who have done well have gotten there because they were treated others unfairly, or because they had it handed to them on a silver platter.
Personally I don't subscribe to the theory that the little guy just can't get ahead, I think it's a cop-out.
Are there legitimate situations where people can't get out of debt because of medical bills, addictions or because they live in a third world country and are truly poor for reasons beyond their control? Yes. Bad things happen and people get into financial trouble they can't get out of. Is that true in most situations? I don't think so.
Different World Views – Poor & Broke
There's a difference between thinking you're broke, and thinking that you're poor. Being broke is temporary, and you know you'll do better. When you believe you're poor (even if you are in fact only broke), you know you're going stay that way. It's a complete worldview where you are at the bottom, and there's no way out.
I believe that many people nowadays believe that they're poor, even though they have the resources to do better. The same people you'll find complaining about not making enough money, are the ones with a $400 car payment, expensive clothes and an $1800 TV. The problem isn't that they're poor, the problem is they're bad with managing money, and that they haven't learned to do without. They want things, and they want them now!
If they were to sit down, come up with a financial plan, and decide that they're going to stop going into debt for things they don't need (like $400 car payments and expensive TVs), they would most likely be able to turn their situation around.
Here's a commentary from the Dave Ramsey forums a while back that really crystallized my feelings on the topic:
The American Dream is still very much alive and well. But rather than working for 10 or 20 years to get there, people want to have it NOW! Selfishness and lack of self-control are major reasons why so many people can't “get ahead.” People want the big house, nice car, great neighborhood at 25 years old. What it took our parents 30 years to achieve, we want in 5 years.
If people take control of their financial lives…pay off student loans, credit cards, don't buy/lease a new car for $500/mo.. and instead actually live within their means and save money to buy those things, they wouldn't be in such a mess. People take on too much mortgage that they know they can barely afford – just look at all the foreclosures for people who knowingly bought a house they couldn't pay for.
Its really not that hard to get out of debt and take control of your financial life. I am 29, my wife is 27. After finishing school, we took about 2 years to pay off all of our student loans, credit cards, and anything else that we owed to anyone (except our modest mortgage). $45k paid off in 2 years. Did we have to make sacrifices and actually live within our means? Absolutely. Was it worth it? I wouldn't trade it for the world. Now, when everyone is complaining about high gas prices, it is only a minor annoyance to us. Many of those people complaining about not being able to afford gas make me laugh, as those same people are frequently paying a $400-700/mo car payment instead of driving something they can afford.
When you don't have any debt and you control your money rather than letting it control you, you have a financial peace that is indescribable. Not only do you not worry about making your car or house payment or worrying about where grocery money is going to come from, you actually have money to save and invest and give to worthy causes. Stress in life declines dramatically.
So don't have a pity party for yourself and cry “woe is me,” but instead make a plan and take control of your financial life.
It is easy to complain about where you are, and about how you'll never be able to get ahead, but it's another thing to actually take stock of your situation and start the hard work of making it better.
If you're in that situation right now, make this the year where you change your life, and take control of debt.
Make this the year that the little guy got ahead, and won!
- Thoughts On Being Broke And Being Poor @ The Simple Dollar (a commentary similar to this one.)