Keeping Bad Financial Habits and Behaviors Will Keep You In Poverty

Weekly Sunday Thoughts: June 7, 14, & 21, 2020, 12:57 PM EDT

Some people stay in poverty because they will never change their bad behaviors. The fact of the matter is that someone can receive 100,000 dollars today, and two months later, it will be all gone, and that person is back in poverty. Other people have moments of transitioning in and out of debt due to a few reasoning. So how does one keep from going back to destitution when he or she achieves financial success? The bottom line is that there is no one formula out there to ensure someone does not go back to poverty. However, experts say if a person never changes any of his or her negative behaviors, then the person remains in poverty.

Signe-Mary McKernan, Caroline Ratcliffe, and Stephanie R. Cellini (2009) explore in their research journal article titled Transitioning In and Out of Poverty various patterns of poverty, which includes both short-term and long-term debt. The fact remains that understanding what leads a person into poverty can also help with how one can escape poverty. A significant number of individuals in the United States move into debt at some point in their lifetime before they reach the age of 65, which accounts for just a little over the half (51.4 percent) of the U.S. population (Rank and Hirschl, 1999).

One factor expert says where individuals stay in poverty, especially higher for African-American and Hispanic American households, are those with lower levels of education (McKernan, Ratcliffe, & Cellini, 2009). I certainly believe that education plays an integral role in one getting out of poverty. I also think that a formal college is not the only path someone can take to elevate himself or herself out of debt (McKernan, Ratcliffe, & Cellini, 2009). Other avenues one should explore technical schools, career college two-year programs, or certifications/licenses like Real Estate or Health and Insurance.

Not surprisingly, experts also say that the longer a person stays in poverty, the less likely he or she will escape poverty unless bad behaviors are changed (McKernan, Ratcliffe, & Cellini, 2009). The fact is overspending one’s income on frivolous, not essential items will undoubtedly keep a person in poverty. The ability to not hold a job due to poor working habits will also trigger poverty spells. Working hard on one’s position and moving up the ladder will also help one to stay out of poverty if negative spending habits remain.

Many Americans become victims of overspending their finances, ending up broke month after month (Kirkham, 2016). This vicious cycle of overspending leaves them destitute and stuck in a loop of poverty each month. Payday loans, debt settlement scams, or using your credit card without paying the balance each month will certainly keep one in poverty.

The best practice is never to get started with a payday loan for these types of loans that carry huge interests. The best method for one’s credit card usage to only use for emergencies or items one needs that one can pay off at the end of the billing cycle. Another lousy behavior one possesses is putting today’s happiness (spending on things not required) before future financial needs (Kirkham, 2016). Removing this temptation of overspending of items, one does not need can undoubtedly help with staying out of poverty. 

Possessing a lack of emergency funds, poor planning, not saving for rainy days, and not keeping track of where one’s money are all other factors that prevent one in poverty. These are bad financial behaviors that certainly will keep one in poverty. The best practice is to try and save 10% of one’s income each paycheck. If one is unable to accomplish this goal, saving as little as $5 to 10 dollars a paycheck, in the long run, will help with being able to possess emergency funds for those rainy days.

Maintaining a great plan is another excellent starting point for breaking the cycle of poverty. Planning starts with a budget. Kirkham (2016) describes a budget as one’s personal finance 101. The key to financial success and financial independence comes from sticking to a budget one has created. This outline also will allow one to keep track of where the money goes each month—knowing that any money spent outside of a budget creates a hardship, which can lead to poverty.

PANDEMIC BREAK Starts from June 22, 2020, to January 02, 2021. We will return on January 03, 2021. Stay Safe During This Difficult Time!

– Isaac Davis, Jr., MBA, HIFE CCP, The Small Business Guru


Kirkham, E. (2016, May 16). 23 Reasons why you’ll always be broke. Money Magazine. Retrieved June 21, 2020, from

McKernan, S., Ratcliffe, C., & Cellini, S. R. (2009). Transitioning in and out of poverty [Abstract]. The Urban Institute, 1(1), 1-2. doi:

Rank, M. R., & Hirschl, T. A. (1999). The likelihood of poverty across the american ddult life span. Social Work. 44:201–16. 

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