Reasons Why Do Some People Remain Poor for the Rest of their Lives

9. You don’t learn from mistakes and you fail to course-correct your finances.

Probably the most stupid way of getting stucked in a financial problem is failing to even correct the ways that brought you there in the first place.

“There’s almost always a cheaper or better way of doing something, but you have to get into the habit of questioning and challenging your current way of going about it,” said Stefanie O’Connell of The Broke and Beautiful Life.

“Use your creativity and critical-thinking skills to find and implement more cost-effective alternatives, whether it’s renegotiating your insurance rates, switching banks or planning your next vacation.”

 

10. You are spending too much on rent or housing.

Did you know that the rule of the thumb in renting is that you need to spend no more than 30% of your net income (income after tax)? If you are spending more than that, think about getting a smaller space.

“Spending too much money on rent or a mortgage,” is the biggest reason people struggle financially, said Andy Josuweit, CEO of Student Loan Hero. “After living in New York City for a few years, I met dozens of young people who were ‘house poor.’”

“These were people who make above-average incomes but end up spending too much on rent,” he said. “As a rule of thumb, you should try to keep housing costs under 20% of your income, as opposed to the 28% to 30% limit that most banks allow.”

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