What are some of the mindsets of poor people that keeps them poor?

In My Humble Opinion
1

In this thread asking Why Would an African American Dislike Direct Deposit? people described a number of habits of people that tend to keep them poorer than they need to be, either by incurring hidden costs or failing to take advantage of things that would get them more money:

  • Believing that money in the cookie jar/under the mattress is safer than in a secure FDIC insured bank.

  • Incurring huge fees at the check cashing place.

  • Going to the casino or playing the Lottery…period.

  • Not reading/understanding the terms and fees of their credit/debit cards.

  • Not saving at least some money in an interest bearing account. (Yes, I know it’s hard. But guess what? However poor you are, I bet there is someone else 10% poorer than you. Live like them and put the 10% difference in the bank.)
    Some others I’ve witnessed:

  • Failing to recognize the value of an education. “College is a waste of time and money” and such.

  • A general lack of understanding of the basic accounting principles of
    Net Worth = Assets - Liabilities
    Net Income = Revenue - Expenses

  • The sort of jealous “crabs in a pot” mentality that resents any coworker who aspires to advance themselves in their career. Oh “so and so is looking to become ‘management’” or “why is he working so hard?”.

  • The general notion that someone should “take care of them” whether that is the government, their employer, family or whoever. I mean it’s nice if it happens, but you can’t plan you life by it.
    What are some others?

2

Cigarette smoking seems more prevalent among the poor. That’s got to be a big expense relative to income. Same goes for having poorly maintained gas-guzzlers and long commutes to low-paying jobs (that is, thinking it’s worth it to commute really far to low-paying jobs in a gas guzzler)

3

I can tell you right off the back the reading and writing skills of these people are usually horrible. Oh they can write their name but that’s about it. I used to help out at a neighborhood food bank and part of what we’d do is help people fill out the form for food stamps.

They cannot do this? Yes, their reading and writing is so poor they can’t fill out the food stamp form.

Now think about this, if you can’t fill out a simple form, you’re whole life is downhill at that point. You won’t make it in the world.

If you can’t fill out a form for food stamps, you can’t fill out a form for a library card, a job application, you can’t use a computer, and the list goes on.

4

For a lot of poor people, the margins are so thin that a simple set back (the kind that a lot of people don’t even really notice) can be catastrophic. For example, if your car breaks down, or your kid is sick, that can mean missing a day of work at a job that isn’t forgiving about missing work. Small misfortune can have a huge impact in the lives of the poor.

5

And the variation: “You’re making us look bad” by working so hard/not slacking at that job and showing it’s easier to do than another worker was saying. My husband has been accused of this by a few of his coworkers; he doesn’t slack off when delivering the mail, and if he has to fill in on a route and does it an hour and a half faster than the usual slacker who does it, then they get mad at him. (The slackers typically find a secluded place to park and yap on the phone for a while, that kind of thing.) Sure, they may get away with it for a while, but routes are reviewed yearly with a supervisor walking right along with them, plus inspectors will sometimes randomly pick routes to check up on during the day, so the gravy train won’t last forever.

This isn’t an exclusively ‘poor people’ attitude in general, but if you get laziness and entitlement linked together, and you’re not very good at pulling this off, it can easily serve to help keep one poor via job loss or assignment to less-desirable jobs.

6

It is all this, plus the fact that life is easier, the more money you have. If you are poor, a simple problem becomes a disaster-say you have an old car, that you depend on-one morning, the transmission fails-and costs you $3000 to fix-there goes your kid’s education saving account. Plus, you cannot affort to buy high-quality stuff-the chinese-made shoes you buy your kids wear out in 6 months-if you had the money, you would have bought high quality shoes that would last 4-5 years. Simply put, you have no insurance against disaster-you get knocked down by things that middle class people find to be annoyances. You may also live in aghetto-and there are no supermarkets-so you pay high prices for low quality food. The nearest supermaket is 1 hour away by bus-and you don’t have the time to shop there.
Being poor creates a lot of problems, and lack of financial education compounds it.

7

Agreeing too with madmonk28 and ralph124c - there are obviously a lot of problems associated with having a thin margin to work with. Some people make the only decisions they can, while others compound the problem with really bad choices. I grew up working-class poor-ish, and am glad my parents managed to make good choices and be lucky often enough as well.

8

This is not an exclusive failing of the poor.

Young rich guys think they should be entitled to an Ivy League education because they have relatives who attended the school. They think they can break the law and get bailed out by family members with cash. As they grow they expect daddy’s business connections and the old boy’s network to get them a job somewhere. Or rescue their business if it fails.

Bank officials adhere to this mentality as well. You and I can lose our homes because we made poor financial choices. Big financial insitutions who do the exact same thing meanwhile are deemed “too big to fail” and bailed out by the government at public expense.

9

Having children before they’re mentally or financially capable of handling it seems like a pretty huge reason to me.

10

Though there are often odd problems contributing to that as well. For example - as I imagine you know - you can’t just walk into a CVS in DC and buy condoms. For some inexplicable reason, they’re locked up. Things like this probably don’t have a huge impact, but they can’t help.

11

I love this question/topic, though I have no great insights into it. My brother (in his 50’s) has no spare cash, no savings, no investments, though he is gainfully employed. There’s some deal with a decades-old problem with the IRS having liens on everything…this is something he could have resolved a very long time ago but he hasn’t. He seems to be purposely keeping himself with no funds, and I am baffled as to why. A friend of mine (in her 60’s) is in the same no-funds predicament and is making no attempt to remedy that. I think the term “mindset” is spot on–this is what they are used to and they can’t change it? Totally puzzling to me when attaining some solvency is within reach.

12

Something an inner city school teacher told me - she said she really believes some of her students, and even their parents, who live in old city houses covered with peeling lead paint - their brains have really been affected over generations.

13

They’re locked up because they’re one of the most (if not the most) shoplifted item in drug stores. The packages are easy to pocket and a large proportion of young men and women are embarrassed to buy them, so they’re often stolen. The unfortunate downside of locking them up or keeping them behind the counter, of course, is that people have to ask for them, which increases the embarrassment and deters the purchase.

14

A sense of fatalism that this is what it is - its described really well in “There Are No Children Here” about growing up in the Chicago projects.

That sense of fatalism doesn’t tend to encourage a lot of planning. Tomorrow isn’t going to be better than today, why plan for it?

15

Well, the fact of the matter is that if your family has money, they can afford to pay for $50,000 a year colleges, lawyers, fines and maybe even a small start-up business without it being a major hardship. That’s just the nature of having money versus not having it.

But are poor people helped by the collapse of a company that employs tens of thousands of people? It’s not just investment bankers who make $500,000 a year who are affected. What about the deli down the street where they eat for lunch?

I would say that poor people tend to look at rich people as a sort of single monolithic overprivileged group that should be “punished” as opposed to studied to see how they became rich.

16

Joe Queenan’s memoir Closing Time goes into detail about growing up poor as the son of an alcoholic, and how poverty affects the mindsets of the people who live in it. I’m paraphrasing, but one point he makes is that poor people learn to buy crappy stuff, and if all possible overpay for it.

I work with college students from diverse socioeconomic classes, and one thing I’ve realized was a huge privilege for me going through college was that my middle class parents had money and flexible jobs so that if something happened like my grandparents needing care, they could and would provide it themselves rather than having me miss class to do it. Related to the point that Madmonk made about poorer people having smaller margins, they’re also more vulnerable if they try to step in to help other people through their catastrophes. In the saddest cases I’ve seen of this, students try to help support their families through working low-wage jobs, miss classes as a result, and then screw themselves out of scholarships or financial aid.

17

It’s kinda more layered than that, I think.

I have helped lots of poor folks fill out applications for foodstamps and such, and I can tell you that most of those folks can read just fine, and have no problem filling out a job application. It is the fact that they are TERRIFIED of doing it wrong. If you mess up one little thing, the worker may not accept it; they will mark a bunch of stuff on your paper and tell you to come back in 2 weeks.

The forms can be convoluted and I think there is plenty of room for them to be simplified. Sometimes I wonder if there is some kind of benefit to all that red tape.

I agree with Dangerosa and others that there is a certain hopelessness to the mindset of poor people. As usual, I will say what I feel is becoming my catchphrase; it’s more layered than that. When you are in the ghetto, it doesn’t feel like hopelessness every day. There are celebrations, happiness, music, poetry, cooking, learning…I mean, there is so much life and energy in even the poorest neighborhoods. But there really does seem to be an underlying feeling that there is no escape from poverty. It is just a friend and enemy that walks with you. The idea that you can completely beat it is just not common (although, of course there are exceptions).

Let’s say I beat it. Let’s say I do everything right and make the right moves. Let’s say my credit was jacked up since birth (seriously, this happens, as families have to use their kids social security numbers to get their gas and electric on in their name, since the parents names are bad, and then when they can’t pay that bill, the kid’s credit is doomed from babyhood) let’s say I finish school and get it all worked out. Well guess what? I have an entire family and social network that needs me. They couldn’t do what I did, and they need to borrow this, the kids don’t have any school clothes this year, they all need to move in with me because they have been evicted, grandma needs 5,000 to keep her house from foreclosure, etc.

That kind of thing can be discouraging. Folks start to look at eachother like, hey, we are all in this hell together, so lets just make the best of it, and not get any high ideas about escape. IMO, of course, my viewpoint is limited.

18

Some of us are so immobilized by fear and anxiety we spend most of our lives in denial, then hit forty and don’t even know where to begin. We’ve messed our credit up because a lost job meant a car repo, we haven’t taken care of our teeth because we couldn’t afford dentistry so we have a mouth full of holes, we have no skills because we spent most of our adult lives in labor or retail or food service. We lack self-confidence so when there’s a chance to get ahead we think we could never do that. We watched our parents and grandparents scrape by all their lives and think this is just our fate, this is how “our people” are. Some of us still battle old wars and nurse scars from childhood abuse, neglect, and molestation. We’re haunted by ghosts we just can’t shake.

Some of us are so scared to leave the house or pick up a phone to call for help we drown and nobody, not even our closest friends, realize just how far we’ve fallen. And then we see most people like us probably deserve it, what with our drinking and smoking and lottery ticket scratching and welfare mentality.

I don’t know what happened to me. I was in gifted programs in school. I apparently have an IQ welcome in Mensa. My ACT score beat most everyone I knew including my big brother, who is by far the smartest man I know (and who actually DID something with his life!). Eh but that was 22 years ago.

I hunger for knowledge, spending most of my time studying whatever it is I find myself interested in. I dropped out of school to work, partially because my mother was dying and we needed the money and partially because I hated high school. Truly, deeply hated it. I felt so stupid and sleepy and I never found my place with the kids I went to school with. I just wanted to move on. I went to college twice. Once I dropped out when my mom died. Again I dropped out because I have a needle phobia and they wanted my immunizations updated. That right there, as silly as it sounds, kept me from finishing college. And I was actually pretty happy there taking classes I enjoyed. Early on I tried seeking help but twice I was told it was just something I had to get over, without any clue how. So I gave up. Every year of my life I’ve become more anxious, with new fears and phobias developing. They came in waves. I rarely leave the house now, just to take my little girl to school and grocery shop but if I could, if there was any way in the world, I’d never leave this house. I’d never leave this chair, to be honest. I feel frozen.

So yeah, that’s how some of us stay poor.

19

It starts when you’re young, or at least it did with me. It’s natural to gravitate toward people who are in a similar situation.

My parents and the parents of my friends were working folks or single mothers. Not one parent was a professional or owned a business. Our parents didn’t encourage us to go to college (and neither did our teachers). We did what our parents did – took a job right out of high school, joined the military, or got married and started having babies. We didn’t budget or save because no one we knew budgeted or saved. It wasn’t a conscious choice – it was simply outside our experience. We stayed in our comfort zone.

20

Some of it is mindset, some of it is buying habits, some of it, as an excellent article once called it, is “The High Price of Being Poor”.

Some of this has already been mentioned (higher prices for food and toiletries in low income areas) but here are some more:

If you can’t meet the credit requirements or keep a minimum balance in the bank, they won’t give you an account. So you *have *to use a check cashing place. With fees.

Poor people can’t buy in bulk, as the cash outlay is too high, plus there’s no place in a small apartment to store 36 rolls of toilet paper. So you buy the $4 pack at Walgreens this week and next week and the week after… Same with everything, from food to toothbrushes.

When you’re short on money, you miss due dates, and pay late fees. Credit cards, electric bills, even the city sticker for your car…everything costs more when it’s late. And then, of course, your interest rates are hiked and your credit score sinks, and you owe even more next month.

Loans are given, if at all, at higher interest rates when you’re poor, including car loans and mortgages. At least 2 percentage points on cars and one on mortgages.

Car insurance, home insurance and renter’s insurance all cost more for poor people. In many cities, hundreds of dollars more per year for the same car, same driver’s risk as a wealthier customer.

When you’re poor, the electric company and gas company (not to mention cable and internet) charge deposits of $100 or more to set up your account at a new address, even if you’ve been a customer at a previous address. $100 may mean nothing when you’re middle class, but it’s a lot of money when you’re truly poor.

Renting an apartment with no job (or a new job) and poor credit? Good luck. If you can find someone willing to rent to you, the security deposit is doubled. In this neck of the woods, that means an *extra *$1000 out of pocket up front. Worse, it means coming up with $2000 all at once.

So when you can’t rent an apartment, you get a room in a longterm “motel” for a while. So you have no stove and no fridge and they don’t allow hotplates. Guess it’s Burger King for dinner again. Burger King feels like a cheap meal, but if I just had somewhere to make a pot of rice and beans, it would fill me up all week for that same $7 I just spent on a “value” meal.

I’m wary of the OP, because it sounds like a blame the poor people for being poor thing. And, certainly, there are mistakes that many of us make. But please also be aware that the world is just a more expensive place for us, and when you have to spend more just to get through today at the same time as you make less, it’s extremely hard to really sock anything away or make the best long term spending choices, even if you know what they theoretically are.