Question for lower income folks

[4tify]

I have been asked by a nonprofit that serves lower income people to discuss financial well being as part of a series they do to help educate members. Some of these people are living on minimum wage or have been hit with medical emergencies, etc.

For those of you pursuing FI on a lower income, what have you found to be the best practices to get ahead, whether practical or psychological?

Also interested in any good resources you’ve discovered. Thank you!

[ixtap]

One thing these talks tend to ignore is the community aspect of finances. There will be pressure to help your uncle repair his car to get to work if you have any savings.

I have seen some people use retirement accounts to help balance savings with this communal pressure. The savings account is available, but the retirement account is tied up with all kinds of restrictions.

Finding free banking services can be a real PITA, as well, leading to using check cashing services. It might help to point folks to local credit unions, but even some of them have high fees for basic accounts.

[Log]

One thing these talks tend to ignore is the community aspect of finances. There will be pressure to help your uncle repair his car to get to work if you have any savings…

This is such an important and under-discussed piece of wealth inequality, especially speaking inter-generationally. There’s a lot less social sanction on a white person going off and becoming wealthy and keeping it all for themself. The same amount of money goes a lot less far towards building wealth for someone who’s enmeshed in a community full of fires to put out. The other piece of individualistic culture that makes wealth building easier is willingness to abandon roots to move somewhere there’s more opportunity. Just look at how well immigrants from poor countries do in America compared to people born into poverty here—because immigrants have pretty definitionally made the first move towards cutting some of those ties and starting afresh for themselves.

Not that any of that is useful advice. But I guess my point is that people pursuing FI on a low income are likely coming from a place of having fewer obligations to their community than the typical person trapped in intergenerational poverty.

I would second sequestering savings into inaccessible retirement accounts as much is feasible, ideally investing 10% or so of each paycheck as soon as it comes in.

[vand]

The concept of complete financial independence is just too much to throw at people who are just struggling from day to day.

Most people on low income or not good with money just want to live without financial stress, which comes from 2 things: debt and risk.  If you focus your core message around these then that will chime the most.

Balancing your budget essential to the first step, being well informed about choosing a sensible investment strategy is going to minimize the 2nd.  Above all, imo, you HAVE to avoid credit card and other high interest debt.  People have to be honest with themselves - most people aren't so stupid to think that it's free money, but most people kid themselves into thinking that they can afford it. They people who rely on credit cards are those who can least afford them.

[Freedomin5]

There are a few high school dropouts and people on disability in DH’s family, and my family volunteers a lot overseas in developing countries with low income folks. One of the biggest aspects of lifting someone out of poverty is education, which allows them the chance to get better paying work. Yea, I understand some can’t for various reasons, but those who can, should.

The other type of thinking I’ve noticed when talk to them is this idea that you save money to spend it. So you save it up to spend it on a car. Or you save up an emergency fund to spend it on vacation. They don’t save it up to invest it. So the first thing I told DH’s nephew who got his first job laying flooring is to build and emergency fund and Don’t Spend It. The next thing I told him was that once he had that saved up, he should invest it — not in any get rich quick schemes but in a boring equity fund.

When they do invest, they tend to trust the people they know who look like they’ve made it. They’re more vulnerable to scams. (*Ask me how I know.) Many do not understand how investments work and may be wary of banks and investments that they cannot see or touch.

If you have money, you are expected to help family members out if your family member needs money. It builds social credit because if you are in need, your family would rally around you. But if you don’t help when you have money, you’re going to struggle when you need money because people aren’t going to help you. To work around that, those with a bit of money need to do something with that money so it looks like you don’t have money. For example, if part of your paycheck automatically goes into a retirement fund, then you don’t actually have that money to spend on others. That’s what we do with our money. DH’s family understands that we have a mortgage payment, so they don’t ask us for money anymore. They also see that we don’t live ostentatious lives and buy lots of things secondhand. That reinforces the idea in their minds that we are also not well-off.

[Bee21]

The social aspect of poverty is important. I Don't necessarily see it as a negative force, though. Your friends and family will help you, they don't necessarily demand handouts. It happens,  but it is not the norm. It's a different type of interdependence. 

The main difference i can see between poor and wealthy communities is their attitude to money and planning. They spend as if there is no tomorrow,  because somehow believe that they will never get ahead. Luxuries have a different definition as well. I have seen it often that people who have no hope of getting ahead financially buy that expensive piece of jewelry or fancy beauty treatment, because why not, they want to be seen as normal, non poor person.  They have the big shop on payday and have a feast, even though it is followed by 3 weeks of pasta and potatoes. They buy the expensive toys and the fancy cake for the child's birthday or Christmas even though they have to put it on credit or they won't be able to pay the bills.

Education is the key of getting out, but also financial planning and money management skills, which are beyond the 'save every penny and buy only the cheapest, or buy all those things to make you look like an affluent person' thingy.

[ixtap]

The social aspect of poverty is important. I Don't necessarily see it as a negative force, though. Your friends and family will help you, they don't necessarily demand handouts. It happens,  but it is not the norm. It's a different type of interdependence. 

The main difference i can see between poor and wealthy communities is their attitude to money and planning. They spend as if there is no tomorrow,  because somehow believe that they will never get ahead. Luxuries have a different definition as well. I have seen it often that people who have no hope of getting ahead financially buy that expensive piece of jewelry or fancy beauty treatment, because why not, they want to be seen as normal, non poor person.  They have the big shop on payday and have a feast, even though it is followed by 3 weeks of pasta and potatoes. They buy the expensive toys and the fancy cake for the child's birthday or Christmas even though they have to put it on credit or they won't be able to pay the bills.

Education is the key of getting out, but also financial planning and money management skills, which are beyond the 'save every penny and buy only the cheapest, or buy all those things to make you look like an affluent person' thingy.

I see the two as interrelated. You might as well get something nice for yourself on payday, else it will go for somebody's tires later, rather anything fun.

[MaybeBabyMustache]

I'll just chime in with another perspective, as I think the living in a community with other similar low income folks has been covered well. I have a mentally disabled aunt (she operates around a 12-14 year old level) & the amount of resources she doesn't know about is staggering. She's in a family of all otherwise financially stable folks, all of whom have always helped her out as needed & ensured she's taken care of. She worked full time until she hit 62, but at minimum wage jobs. That was all she was qualified for, and no amount of education was going to help. When my dad retired, he started poking around, ensuring she was taking advantage of all the resources available for her. She most certainly wasn't - reduced property taxes, lower utility bills, etc. He's been able to help her quite a bit. Of course, most people don't have resources like that in their life, so I can only imagine being less capable & having minimal family support would be tremendously challenging. But, I wonder if easy checklists of resources for all kinds of folks at a reduced income level would be helpful.

[Freedomin5]

I'll just chime in with another perspective, as I think the living in a community with other similar low income folks has been covered well. I have a mentally disabled aunt (she operates around a 12-14 year old level) & the amount of resources she doesn't know about is staggering. She's in a family of all otherwise financially stable folks, all of whom have always helped her out as needed & ensured she's taken care of. She worked full time until she hit 62, but at minimum wage jobs. That was all she was qualified for, and no amount of education was going to help. When my dad retired, he started poking around, ensuring she was taking advantage of all the resources available for her. She most certainly wasn't - reduced property taxes, lower utility bills, etc. He's been able to help her quite a bit. Of course, most people don't have resources like that in their life, so I can only imagine being less capable & having minimal family support would be tremendously challenging. But, I wonder if easy checklists of resources for all kinds of folks at a reduced income level would be helpful.

Yes, and also support in navigating or accessing those resources.

[jim555]

I have been asked by a nonprofit that serves lower income people to discuss financial well being as part of a series they do to help educate members. Some of these people are living on minimum wage or have been hit with medical emergencies, etc.

For those of you pursuing FI on a lower income, what have you found to be the best practices to get ahead, whether practical or psychological?

Also interested in any good resources you’ve discovered. Thank you!

If they are in a Medicaid expansion state they should sign up for Medicaid.  If they didn't it can still be retroactive 90 days in most states.

[4tify]

The social aspect of poverty is important. I Don't necessarily see it as a negative force, though. Your friends and family will help you, they don't necessarily demand handouts. It happens,  but it is not the norm. It's a different type of interdependence. 

The main difference i can see between poor and wealthy communities is their attitude to money and planning. They spend as if there is no tomorrow,  because somehow believe that they will never get ahead. Luxuries have a different definition as well. I have seen it often that people who have no hope of getting ahead financially buy that expensive piece of jewelry or fancy beauty treatment, because why not, they want to be seen as normal, non poor person.  They have the big shop on payday and have a feast, even though it is followed by 3 weeks of pasta and potatoes. They buy the expensive toys and the fancy cake for the child's birthday or Christmas even though they have to put it on credit or they won't be able to pay the bills.

Education is the key of getting out, but also financial planning and money management skills, which are beyond the 'save every penny and buy only the cheapest, or buy all those things to make you look like an affluent person' thingy.

This is a really good point I hadn't considered, akin to putting on your own mask before helping others.

[Ron Scott]

The social aspect of poverty is important. I Don't necessarily see it as a negative force, though. Your friends and family will help you, they don't necessarily demand handouts. It happens,  but it is not the norm. It's a different type of interdependence. 

The main difference i can see between poor and wealthy communities is their attitude to money and planning. They spend as if there is no tomorrow,  because somehow believe that they will never get ahead. Luxuries have a different definition as well. I have seen it often that people who have no hope of getting ahead financially buy that expensive piece of jewelry or fancy beauty treatment, because why not, they want to be seen as normal, non poor person.  They have the big shop on payday and have a feast, even though it is followed by 3 weeks of pasta and potatoes. They buy the expensive toys and the fancy cake for the child's birthday or Christmas even though they have to put it on credit or they won't be able to pay the bills.

Education is the key of getting out, but also financial planning and money management skills, which are beyond the 'save every penny and buy only the cheapest, or buy all those things to make you look like an affluent person' thingy.

This is a really good point I hadn't considered, akin to putting on your own mask before helping others.

I like this post by Bee21 too because it seems to address the issue you’ve been asked to discuss head on. These people don’t need a lecture on income inequality as much as real tools they can use now.

To achieve FI, or at least a running sense of financial stability, everyone needs to live within or below their means as best as possible, and to do so through active, disciplined planning. There are thousands of posts on this forum for doing this, and many of us take pride and enjoy it. I’d imagine you could create a nice 10-page handout with the greatest hits around here.

Conspicuous consumption may serve a temporary psychological need but if it is a habit it defeats the goal of financial well being.

Getting value for spend is paramount. This means adequate nutrition for spend on foods, reducing spend on superfluous items, focusing on the total cost of a product (spending a bit more on clothes that will remain in style for a few years and are durable), etc.

Understanding how to shop for sales in today’s complex, digital environment is an art form. But it needs to be mastered. Those who can’t find or wait for a sale end up like those who succumb to impulse purchasing—and people need to understand the concept and cure for impulse purchases!

Side hustle thinking should be discussed. (When my daughter was in her early teens she would buy clothes she liked in popular sizes, when on deep discount at high-end stores, and immediately put them on eBay. Whatever didn’t sell got returned to the store. She could make $75 a week when she was really into it.) Entrepreneurship isn’t just for the wealthy…

Having a solid, hands-on understanding of available government/community services is important. Transportation, some food, some housing repairs, deals on second hand furniture and electronics, etc. are often available to those who know where to find them.

The pros of being banked and how to achieve this need to be understood.

Finally, just as many of us maintain a written financial investment plan, lower income people need one too—one that includes a budget, a personal philosophy on money management, an emergency fund, and a savings/investment plan.

There is a broad array of topics for you to cover to help this group.


One more thing: Many people rightfully criticize Dave Ramsey for his investment advice, but he’s usually pretty good on getting people out of credit crises and on the road to financial well-being. Worth attending to his stuff for your discussion IMO.

[Sanitary Stache]

I have been asked by a nonprofit that serves lower income people to discuss financial well being as part of a series they do to help educate members. Some of these people are living on minimum wage or have been hit with medical emergencies, etc.

For those of you pursuing FI on a lower income, what have you found to be the best practices to get ahead, whether practical or psychological?

Also interested in any good resources you’ve discovered. Thank you!

The reality is that I don’t live in a lower income, but on the forum it almost always feels like I do.

Last year my family of five grossed $55,000 and was getting food stamp benefits for three months.

I can’t fathom how a family of five grossing 35,000/year could possibly get into the situation we are in with respect to best practices.

Our best practices are:

 to have an emergency fund and never use it. Which means delaying purchases, repairing and finding alternate solutions when something that might be an emergency comes up like a broken heating system or broken car or a doctors visit.

Take everything offered. Food shelf, free pages, government benefits, charity from neighbors. Anything free and meets a current need, we will try to take it.

The hardest part is discipline to not make an easy choice or fall into an old habit. Primarily with food shopping and eating out, but also with choosing to make a car trip over a bike or walking trip or choosing to read at home on a saturday rather than scrounge up junky wood to burn in the winter or harvest the free forage when it is available.

I don’t know how to tell someone with very little that they can’t buy an ice cream novelty from the gas station because it is terrible economics but I don’t even have the discipline to buy only one ice cream novelty at 200% markup.

[Sandi_k]

- Take care of what you own. It always surprises me when I see folks with few resources trashing something (like a car!) that is expensive. As a result, what they own gets dilapidated, which pushes them to buy again and again.

- Have a budget for food, and a price book. I won't shop at 5 different stores, but I do have a good idea when something is a good deal, and will add an extra can or two on my shopping trip to build up the pantry over time.

- Have a hard stop on restaurant spending. I am astonished at how frequently my friends with money issues eat out - and they get appetizers, entrees, alcohol and dessert. They also don't eat leftovers.

- Make saving automatic. Even if they start with 10% going off to retirement now, it's a great start. And every time they get a raise, half of it should be earmarked for savings.

- Apply for a new job every 18 months; it's one of the quickest ways to improve your income. So learn how to write a resume and cover letter; spend time on AskAManager.com, and get advice and edits from good friends who are succeeding in the workplace.

[Zhiantara]

Are you speaking directly with the lower income people? Is this a presentation or a workshop?

Lower income people already have a tonne of knowledge about how to get by without any money. Start there, with a strengths based approach. Ask people to share what their understanding of financial wellbeing is and what they have found helpful, write things on giant sticky notes so you can move them around to group them into categories, or, you know, whatever is going to work in the setting you're in. If it's a just a presentation, see if you can gather the information from people ahead of time and start the presentation with that.

a) this respects the lived experience of the participants
b) it bypasses some of the resistance many people feel
c) it helps develop buy-in from the participants
d) you will learn something from the participants

Being low income is different to being chaotic with money. It's not that you need to get your shit in order (or, at least, not just that), it's that you have fewer options to begin with. You can't afford to live in an area with public transport and you can't afford a car so you take Ubers a bunch and that works out more over time. You can't buy the expensive boots that will last years so buy the cheap ones that wear out every three months and end up spending more over time. You're so tired from working multiple jobs that doing that short course to increase your chances of landing a better paying job is Too Hard. It's all well and good to say live within your means, but some people's means just can't stretch far enough. Over time it takes a psychological toll and reduces your capacity - it's hard. The Financial Diet has some videos about this [I'll get off my soapbox now]

Otherwise, yeah, most of what everyone else has mentioned is good: managing expectations of supporting family, how to find supports and resources, spending plans (budget is a scary word), etc.

I don't recommend a 10 page handout. In my experience no one will read it (I'm a social worker). But giving people the option of writing down their Why and the strategies they think will work for them can be helpful. (A lot more people are functionally illiterate than you'd think, so requiring people to read and write can exclude some very smart people who genuinely want to learn and make changes, that's why there has been a move towards simplified/accessible language recently - or at least there has been in Aus).

I was low income for a long time but was always a saver. Then I started earning more money and I had all these savings but I didn't know why or what to do with the money - I was always just told that I should save but not given any real direction about it. Fortunately I found MMM right about then and figured out that my Why's are to be able to pay my bills when they come in, to not worry about losing my home, to not worry about losing my job and to be able to work part time when I'm older (I actually love what I do, I just don't want to have to do it for money full time until I'm 90).

You probably already know this, but you can't tell people how to spend their money. If they want to buy the stupidly expensive ice creams then they can. But you can help them understand their purpose for improving their financial wellbeing. Everything else is up to them, which is actually both respectful and empowering.

Here's how a local bank presents financial wellbeing; might give you some ideas (I don't use this bank, but I find the language they use in this tool more or less appropriate)
https://www.anz.com.au/personal/financial-wellbeing/

I'd love to hear how it goes and how you end up approaching it :)

[Smokystache]

Showing actual numbers on the real costs of:
- "rent to own" stores/products   (aka, how to buy a $300 big screen TV for the bargain price of $1200!)
- payday loans
- title loans

[Metalcat]

Are you speaking directly with the lower income people? Is this a presentation or a workshop?

Lower income people already have a tonne of knowledge about how to get by without any money. Start there, with a strengths based approach. Ask people to share what their understanding of financial wellbeing is and what they have found helpful, write things on giant sticky notes so you can move them around to group them into categories, or, you know, whatever is going to work in the setting you're in. If it's a just a presentation, see if you can gather the information from people ahead of time and start the presentation with that.

a) this respects the lived experience of the participants
b) it bypasses some of the resistance many people feel
c) it helps develop buy-in from the participants
d) you will learn something from the participants

Being low income is different to being chaotic with money. It's not that you need to get your shit in order (or, at least, not just that), it's that you have fewer options to begin with. You can't afford to live in an area with public transport and you can't afford a car so you take Ubers a bunch and that works out more over time. You can't buy the expensive boots that will last years so buy the cheap ones that wear out every three months and end up spending more over time. You're so tired from working multiple jobs that doing that short course to increase your chances of landing a better paying job is Too Hard. It's all well and good to say live within your means, but some people's means just can't stretch far enough. Over time it takes a psychological toll and reduces your capacity - it's hard. The Financial Diet has some videos about this [I'll get off my soapbox now]

Otherwise, yeah, most of what everyone else has mentioned is good: managing expectations of supporting family, how to find supports and resources, spending plans (budget is a scary word), etc.

I don't recommend a 10 page handout. In my experience no one will read it (I'm a social worker). But giving people the option of writing down their Why and the strategies they think will work for them can be helpful. (A lot more people are functionally illiterate than you'd think, so requiring people to read and write can exclude some very smart people who genuinely want to learn and make changes, that's why there has been a move towards simplified/accessible language recently - or at least there has been in Aus).

I was low income for a long time but was always a saver. Then I started earning more money and I had all these savings but I didn't know why or what to do with the money - I was always just told that I should save but not given any real direction about it. Fortunately I found MMM right about then and figured out that my Why's are to be able to pay my bills when they come in, to not worry about losing my home, to not worry about losing my job and to be able to work part time when I'm older (I actually love what I do, I just don't want to have to do it for money full time until I'm 90).

You probably already know this, but you can't tell people how to spend their money. If they want to buy the stupidly expensive ice creams then they can. But you can help them understand their purpose for improving their financial wellbeing. Everything else is up to them, which is actually both respectful and empowering.

Here's how a local bank presents financial wellbeing; might give you some ideas (I don't use this bank, but I find the language they use in this tool more or less appropriate)
https://www.anz.com.au/personal/financial-wellbeing/

I'd love to hear how it goes and how you end up approaching it :)

This.

I've seen too many people want to "help" but their version of "help" mostly just makes people feel judged for making the "wrong" choices. Kind of like Jillian Michaels shaming fat people with her "help."

Most people are trying really, really hard, and if you want to help them see better options, you have to first understand that their way of doing things feels right to them, and probably takes A LOT of effort, likely more effort than you ever had to put in to making financially adventageous decisions.

You want to energize and harness the effort folks are already willing to put into their quality of life.

It's also going to depend on who your audience is and what their main concerns are. Do you have a sense of who your audience will be besides low income? Do you have a sense of why they're willing to spend their precious time listening to you, and what they're hoping to get from it? The organizers should be able to give you a good sense of this.

"Low income" is a pretty broad category of folks, and the advice that might be good for one group could be condescending and out of touch for another.

A PowerPoint presentation about using budgeting software and grocery saving apps isn't going to land well with a group of recent immigrants from rural Indonesia with no tech skills who might benefit A LOT more from free courses at the Library on how to use computers, and community resources that can help them navigate the infrastructure and language barriers of their new life.

A focus on education might not resonate well with middle aged single mothers who are already working 4 jobs and may barely be literate. Whereas they may benefit enormously from a resource map of social programs and non-profit organizations.

A digital resources approach could resonate with a bunch of young, struggling, digital native gig workers who could really benefit from understanding more about budgeting for inconsistent incomes, understanding taxes, and health insurance, and side hustle opportunities.

If you really can't get any info on what the group needs/wants in advance, then I would make sure to be prepared to pivot live. Have a bunch of options at the ready and start with info gathering to first understand the group you aye working with and then pull from your collection of resources to match what comes up during your exploration of their needs.

[Cawl]

Instead of index funds, initially invest in utilities and other stable stocks until you get your economic engine running.

[Adventine]

@4tify , did you get any more information about your audience? Even knowing just the demographics would help people tailor their suggestions in this thread.

[light switch]

I think the best way to accomplish something positive would come from polling the audience. Make a questionnaire asking a person to express interest in a range of topics by checking a box. Such as “ I want to know about coupon cutting.” Check the box with 1 being very interested and 5 being not at all interested. Make a dozen better questions than my example, and ask them to answer. Once you’ve got that information, you will have a much better idea about what your audience wants to know about. There’s no point in teaching them about index funds, if they’re worried about how to negotiate with a landlord/billing company/employer. If you’re up there talking about anything other than their immediate concerns, you’re wasting everyones time, and your opportunity to help someone.
Don’t be too hard on yourself if you don’t get much engagement. I’m sure you know that being poor comes with a host of daily, high stress decisions that folks are just marinating in.

[partgypsy]

One thing these talks tend to ignore is the community aspect of finances. There will be pressure to help your uncle repair his car to get to work if you have any savings…

This is such an important and under-discussed piece of wealth inequality, especially speaking inter-generationally. There’s a lot less social sanction on a white person going off and becoming wealthy and keeping it all for themself. The same amount of money goes a lot less far towards building wealth for someone who’s enmeshed in a community full of fires to put out. The other piece of individualistic culture that makes wealth building easier is willingness to abandon roots to move somewhere there’s more opportunity. Just look at how well immigrants from poor countries do in America compared to people born into poverty here—because immigrants have pretty definitionally made the first move towards cutting some of those ties and starting afresh for themselves.

Not that any of that is useful advice. But I guess my point is that people pursuing FI on a low income are likely coming from a place of having fewer obligations to their community than the typical person trapped in intergenerational poverty.

I would second sequestering savings into inaccessible retirement accounts as much is feasible, ideally investing 10% or so of each paycheck as soon as it comes in.

regarding communal pressure re: immigrants, no it's still there. And it is a helpful thing. Lots of pressure to succeed and send money back to the home country, andeven help people to immigrate here. In the same way, first gen immigrants often stay with other relatives to live cheaply at the beginning. Seed money, loans, or other help to start businesses is common in those communities. I do agree that there can be a multi generational poverty mindset of if I don't use the money it will be gone (say by the squeakiest wheel) purchase consumable status indicators of wealth, vs use an old phone, car, etc and save all money towards purchasing investments, whether it is convenience store, laundrymats, rental units, etc. A first gen mindset is, you do the work to succeed; aspirations, feelings, and preferences are not in the equation bc you owe the rest of the group to be successful. 

[partgypsy]

I guess one thing is, you can't work your way out of poverty with a min wage job, even if you work a ton of hours, if that's ALL you do. You'll just end up breaking your body down, buying fast food bc you have no time to eat well, not getting enough sleep which leads to poor decision making including impulse purchases, etc etc. Doing it as a stepping stone, or better yet education and/or skills to get out of the min wage trap is vital. 

[Runrooster]

What I notice is that you don’t have to optimize everything just some things. I was thinking of my college years when I worked a part time job to pay everything but tuition. I was lucky that my job paid better than minimum wage while allowing me to study. My housing included room and a well stocked kitchen. My hobbies included a subscription to the film society and other campus events were subsidized. So, when friends wanted to go out to eat every week or two, I had the wiggle room. It felt luxurious to go out for gyros or pizza or sushi. I cut back on that only when I felt like I was gaining weight from that.

It’s like dieting in that there are no hard and fast rules. It’s all very situational. Maybe the person buying a gas station ice cream doesn’t have a car, can’t get a carton from the grocery store home before it melts. Or the bus transfer happens at that gas station and he can see he has ten minutes to wait in the heat.

After years of offering my brother various diets, which he rejected as too strict, he was asking me what I thought about keto. I shrugged and said: try it. Give it a month, if it works keep doing it, if it doesn’t then tweak it. That’s my answer: be curious, optimize what works in your life, your habits. Unfortunately my brother didn’t heed my advice, he just blamed himself for not sticking to it. It’s like he’s looking for some scientific solution to a much more psychological problem. The perfect diet is the one you will stick to. And where you flip the ratio of healthy to unhealthy foods. It doesn’t have to be perfect, it just has to be better.

[Ron Scott]

I guess one thing is, you can't work your way out of poverty with a min wage job, even if you work a ton of hours, if that's ALL you do. You'll just end up breaking your body down, buying fast food bc you have no time to eat well, not getting enough sleep which leads to poor decision making including impulse purchases, etc etc. Doing it as a stepping stone, or better yet education and/or skills to get out of the min wage trap is vital.

I have a hard time understanding the politics that keeps minimum wages so low. The federal rate hasn’t changed in 14 years and is adopted in quite a few of our more backward states.

The political arguments are are designed for the logic of 9 year-olds. One team argues that raising the min will result in a loss of jobs, despite ongoing worker shortages, and the other team has a sativa addiction and tells us the real problem is “income inequality”, conveniently allowing them to ignore the minimum wage and focus on increasing taxes for the wealthy. The stupidity in both of these arguments is unfathomable to me.

[Siebrie]

A budget is not writing down where your money went, it's telling your money where to go!

Usually, annual costs paid monthly are more expensive. It's always suggested to save up during the year and pay in one go for the year. It's also important to know when this day is!

I've heard it suggested to tell just the mothers and wives how to deal with money, and it will improve family life, but I'm not sure I agree.

Spending just 1 hour per week on a fixed time dealing with 'money' makes sure that you know how much there is, and that all bills are paid before their due date, that contracts are the best available/possible, that admin is in 1 place.

Anecdote: watching 'just 1 hour' of tv per day equals to 9 full time work weeks per year. Better to spend it doing stuff that contributes to a better life.

[curious_george]

I guess one thing is, you can't work your way out of poverty with a min wage job, even if you work a ton of hours, if that's ALL you do. You'll just end up breaking your body down, buying fast food bc you have no time to eat well, not getting enough sleep which leads to poor decision making including impulse purchases, etc etc. Doing it as a stepping stone, or better yet education and/or skills to get out of the min wage trap is vital.

Exactly this.

I started out low income.

Continuous improvement of self, learning valuable skills, and learning how to say no to things and people who are not useful or beneficial was the key to getting out of poverty (e.g. saying no to drugs, cigarettes, alcohol, abusive people, users, etc).

[Ron Scott]

A budget is not writing down where your money went, it's telling your money where to go!

Usually, annual costs paid monthly are more expensive. It's always suggested to save up during the year and pay in one go for the year. It's also important to know when this day is!

I've heard it suggested to just tell the mothers and wives how to deal with money, and it will improve family life, but I'm not sure I agree.

A budget is a tool that pushes people to spend more than they need to…because they have money in their budget… Avoid.

When we first got married I went over the credit card receipts and my wife double checked me. I said, I trust you to get it right and we don’t need two of us to do it—Would you like to? She’s been doing accounts payable in the house for decades!

[ixtap]

A budget is not writing down where your money went, it's telling your money where to go!

Usually, annual costs paid monthly are more expensive. It's always suggested to save up during the year and pay in one go for the year. It's also important to know when this day is!

I've heard it suggested to just tell the mothers and wives how to deal with money, and it will improve family life, but I'm not sure I agree.

A budget is a tool that pushes people to spend more than they need to…because they have money in their budget… Avoid.

I never found this to be the case. However, when trying to maintain a tight budget by categories, I found it extremely stressful to have a month and a half available in my clothes budget when what I really needed was an extra $50 for the car. If you are going to teach folks to budget, you need to give them tools for dealing with that situation. The software I explored at the time didn't allow me to move funds from one category to another the way you can with envelopes.

[Siebrie]

If they are really low budget, I doubt there is a 'clothes' budget.

When I was a student living on just the basic Dutch student hand-out and a tiny job, my budget was:
rent
insurance
gas&elec
phone (landline shared with 6 others)
study books
student society (weekly get-togethers for a homecooked cheap meal and discussion afterwards) (lots of items were passed on and/or shared; lots of skills learned; lots of free or cheap outings)
food was the lowest I could get it; hardly any meat, lots gleaned/disounted/in season

Clothes were only considered if I really ran out of trousers or shirts; as long as I had enough wearable clothes to make outfits, I didn't add any items.

[4tify]

@4tify , did you get any more information about your audience? Even knowing just the demographics would help people tailor their suggestions in this thread.

I don’t have exact demographics but most of the people served by the organization are making less than 70k/yr combined. They live across the country so some are in better positions than others, especially those earning minimum wage. Not all are married so those folks are earning less than 35k/yr.

I’m grateful for all the input here and have taken a lot into consideration. The battle is both mental and financial. I found the immigrant conversation especially useful.

I’ll report back if I get further information. Thanks again to all.

[Metalcat]

@4tify , did you get any more information about your audience? Even knowing just the demographics would help people tailor their suggestions in this thread.

I don’t have exact demographics but most of the people served by the organization are making less than 70k/yr combined. They live across the country so some are in better positions than others, especially those earning minimum wage. Not all are married so those folks are earning less than 35k/yr.

I’m grateful for all the input here and have taken a lot into consideration. The battle is both mental and financial. I found the immigrant conversation especially useful.

I’ll report back if I get further information. Thanks again to all.

That sounds like a pretty broad audience.

The questions I would ask of the organizers is how the sessions are marketed and why people are coming. Usually program organizers have a good sense of why people will attend their talks, so they likely have a decent sense of what the actual draw is for their audience.

But if you can't get much more meaningful info than that, then your best bet is to be able to pivot based on live feedback from your audience. Figure out how to determine what their main concerns are and have a few packages of info that you can delve into.

Basically co-create a teaching goal with your audience and be prepared to address the goals that could be generated.

You could break it down into categories like:
-How to save more money (budgeting, cutting expenses, etc)
-How to earn more money (side hustles, upskilling, networking, etc)
-How to understand personal finance (taxes, investing, banking, etc)
-How to access supports (government and non-profit financial and community resources, such as social workers, libraries, community centers, immigrant agencies, disability groups etc)

Not all of this might be in your wheelhouse and if the audience is from all over, you won't be able to point them to specific resources, so it may be more of a general thing, or it could be that you engage them in group work of generating ideas for what resources could be in their community and how to find them.

This is such a BIG topic and you can't possibly be an expert on all of it, and what you do have expertise in may not be actionable, but for sure you have the skills to understand how to find information, which is often what a lot of people lack, especially those under financial stress.

I mean, the number one value we on the forum offer as a financial community is the resources we direct people to. It's very easy to learn the basics of index investing by reading JL Collins, but it's not necessarily easy to know that that's the book you should read when there is a sea of financial books and no guidance.

For a lot of folks, it's all just totally overwhelming, especially for folks who are financially stressed. Financial stress actually significantly lowers people's cognitive function, so for people dealing with daily financial pressure, they're essentially functioning at a much lower IQ than they normally would when it comes to their money troubles. Their problem solving capacity is radically reduced and the giant, multifaceted problem of personal finances feels like a giant ball of tangled snakes that needs to be taken apart.

I was just reflecting on this yesterday for some reason. I was at a VERY bad financial place several years ago and I was reflecting on some of the major decisions I made that were seriously suboptimal. In retrospect it seems so nuts that I chose a series of solutions that were rather stupid and I know that I'm smarter than that and that I've always been smarter than that.

But when I try to put myself back into my past mindset and revisit the steps I took to get there, I can't parse them out clearly. My thinking about the problem literally just wasn't as sophisticated or organized as it normally is. I was not operating with full cognitive function when I specifically tried to handle my financial mess.

I was perfectly capable of intellectual processing at a doctoral level in my school and work, but the overwhelming stress of the financial mess just shut down my processing skills and made me literally quite stupid when trying to figure out what to do.

I did the "smart" thing and immediately sought out the advice of the financial professional who worked with high net worth colleagues. Of course, that was a horrible decision and I ended up in even tighter financial strain because I bought a massive whole insurance policy. Obviously. He saw me coming from a mile away, FFS I cried in my first meeting with him. Easy target.

It wasn't until someone I trusted pointed me to MMM that I was able to make any sense of my giant ball of tangled snakes. I needed shit explained to me like I was 5 because my brain just wouldn't process it otherwise.

So first things first, I would try to assess the financial stress level of your audience. Maybe they're in debt up to their eyeballs and stressed out of their minds because they're one $200 emergency away from their entire house of cards crashing down. Perhaps they're so in deep with payday loan companies that they've literally lost track of how many 400% loans they have outstanding and how much the balance is. And they may not be able to process much in terms of details.

Or perhaps they're mostly already highly optimized, frugal folks with minimal debt trying to figure out how to save and invest the most efficiently on a smaller household income. And they may just need a rundown of budgeting software and index funds and a link to JL Collins blog.

Or they're a combo of all of the above and everything in between, again, it all depends on who the organizers targeted with their marketing and who they normally appeal to.

Now the alternative is to just offer a specific area of knowledge and leave it at that. Just offer what you know and pay quick lip service to the fact that the world of personal finance is massive and that's why so many different resources are needed because so many different, individual scenarios exist.

You could just have an intro that some people will require more community resources, some people more career resources, but that you are covering budgeting and investing (or whatever you are covering) and just accept that your material might not be all that immediately actionable for many of your attendees.

[vand]

TBH you could do a lot worse than pointing then towards Dave Ramsey. He may be marmite on these pages but he has mass appeal for mainstream.

People may not like his morality angle, but it unquestionably works for a lot of people who need to sort their shit out.

[jnw]

I am low income and I used to spend my entire check each month like any other American of any financial class.

Tracking spending is very important and no one will get anywhere without doing it -- what I figure anyways.

By tracking spending I could then see what I needed to work on tackling each area.  I save about 1/2 my net income  each month.

I follow all the advice MMM gives here and try to be as frugal as possible.. Not cheap but smart.  I try and get everything I can used or free. I try and pay fair market value or less for items; preferably items which won't depreciate much if at all.   I make everything from scratch at home and never eat out.

My nephew and his wife are low income but spend like they are millionares, eating out all the time.   I've rubbed off on them a bit and they are doing better now.

People struggling financially should avoid paid entertainment and dining as much as possible.

[kite]

Low income is just low income, it doesn't mean dumb. Sure, there's a study that reveals people facing financial stress suffer cognitive drain, but there are a few problems with those studies. Entire books can be written on that and I'm not going to tackle all those details. My point is this: Don't talk down to your audience. Don't begin with the premise that they know less than you do about what, where or how of their situation or that they have less discipline. Ponder this:
https://www.washingtonpost.com/news/wonk/wp/2016/01/22/why-the-poor-do-better-on-these-simple-tests-of-financial-common-sense/

If it were me, I'd approach as I would any conversation with a teen or young adult and not tell them what works but find out what they already know & think about what is possible in their own life. Then using that, encourage them in the good directions they are already headed. An approach that is more planting the seeds than giving them a recipe. Because, it is my experience that those with low incomes who aren't suffering from a developmental delay or mental health concern are already better at living within a budget. They often aren't deep in debt because nobody extended them credit. They may be hyper vigilant about one aspect of their finances, but like any of us, oblivious about another. The intricacies of their personal situation will be theirs to fix. If all you accomplish is getting to them to think about something from a fresh perspective or spur them towards meeting the person who can help them solve it, you will have succeeded.

[Metalcat]

Low income is just low income, it doesn't mean dumb. Sure, there's a study that reveals people facing financial stress suffer cognitive drain, but there are a few problems with those studies. Entire books can be written on that and I'm not going to tackle all those details. My point is this: Don't talk down to your audience. Don't begin with the premise that they know less than you do about what, where or how of their situation or that they have less discipline. Ponder this:
https://www.washingtonpost.com/news/wonk/wp/2016/01/22/why-the-poor-do-better-on-these-simple-tests-of-financial-common-sense/

If it were me, I'd approach as I would any conversation with a teen or young adult and not tell them what works but find out what they already know & think about what is possible in their own life. Then using that, encourage them in the good directions they are already headed. An approach that is more planting the seeds than giving them a recipe. Because, it is my experience that those with low incomes who aren't suffering from a developmental delay or mental health concern are already better at living within a budget. They often aren't deep in debt because nobody extended them credit. They may be hyper vigilant about one aspect of their finances, but like any of us, oblivious about another. The intricacies of their personal situation will be theirs to fix. If all you accomplish is getting to them to think about something from a fresh perspective or spur them towards meeting the person who can help them solve it, you will have succeeded.

Yes, it's extremely important to distinguish between low income and people in financial dire straights.

That has kind of been my point all along, know your audience.

Recommending Dave Ramsey to a group of low income frugal folks who already know how to save money isn't exactly going to help them.

My point in mentioning those studies was that when I was in finical fire straights, I *definitely* could not process my financial crisis with a clear, cognitively sharp mind.

So if dealing with a room of people absolutely panicked about their ability to pay the rent they still owe from last month, it's important to know if you are working with an audience in crisis.

Extreme stress can make it very difficult to focus and process more stressful information. That was my point.

Again, it all depends on who the audience actually is and what help they actually want.

[kite]

Some more answers about what worked for me in the low income/no income years:

The last part of "Use it up, wear it out, make it do, do without" was a regular part of thriving.  As in "what happens if we just do without X? What's the worst that will happen?"  Often enough, the answer was nothing. 
in the 2008 financial implosion, my employer went bankrupt and suddenly I had no income. We dumped the Sam's Club membership, revamping our price book proved that warehouse club shopping didn't save money in our situation. We still haven't paid to replace the microwave that went bad that year. Nor the dishwasher. Plenty of other frugal habits are straight out of YMOYL and Tightwad Gazette. We will be putting in a dishwasher soon, but I'm gobsmacked that we went a decade & a half without one. 

In my experience, expertise is hyper-local.  Finding all the good cheap or free stuff means exploring your local environs to learn the local thrift shops' cycles, dumpster diving spots, $1 lunches at the senior center, churches offering coffee & donuts after services, art gallery openings with the wine & cheese, volunteering at the local community theater to see some good shows (I'm a stone's throw from one Ivy League university with a serious theater department and another Uni with an excellent Conservatory College); knowing who has the tool lending library and which farmers are giving away gleanings. Free. It's a step (or two) beyond social media buy-nothing groups (those are good) and takes some human interaction to deduce and benefit from. For example, there will be one hiking or Tai chi group on Meetup, but your neighbor's SIL might hook you up with another more suitable one, for example. It's these human network connections that have the biggest dividends. For example: we keep chickens. We've paid to replenish the flock, but at least half the birds we've had over the years were from people who got started & realized it wasn't for them or from people whose town suddenly disallowed chicken keeping and they were desperate to get rid of them. In other words: free chickens. We also get farmers' market scraps for the birds, keeping our feed expenses low. This took knowing a person who knew a person and a willingness to show up every week to haul away scraps for the animals.
It's not so much a thing you can 'teach" and frankly, it's not for everyone. Planting the seed of an idea, though.
Anyone with a hobby who puts the word out and meets others (especially older folks) may happen upon the art supplies, musical instrument, canning jars or tractor parts, woodworking tools for free. We used to pass by a paint shop that put the oops cans out for free pickup on certain nights. It was a quart of something to have fun with for painting trim or patio furniture. My sister is friends with a home stager and has gotten free furniture. Whole rooms full.

[Siebrie]

It's also important, while they are looking to downsize their spending, to see what makes them feel 'poor' and see if can fit the antidote into their budget. For instance: my husband grew up really poor, for him eating meat and especially lamb is a sign of luxury, of 'having made it'. We eat lamb about once very 2 months, from a proper butcher. (We do eat meat regularly, but it's the lamb that makes him feel rich). I get lethargic from the cold, so while I do wrap up, once I get home, the heating is raised to 18C.

We always have a 'fun' budget, any change we find or have left we put in a separate small wallet and it buys us an ice cream, or even a trip to a theatre once in a while.

[4tify]

Thanks again for all the input. Some of this strikes me as Early Retirement Extreme tech, which I've always admired.

Since this is just going to be two half hour discussions with a moderator, I've decided to keep it simple and focus on budgeting and the corrosive effect of debt. The audience is super wide it turns out, from early 20's to 60's, salaries from minimum wage to pretty decent. Way too wide, but oh well.

Maybe some one will hear something useful.

[sonofsven]

The concept of "paying yourself first" is going to laughable and, perhaps, offensive, to those that struggle to even pay what they owe and are conditioned to pay themselves last, or, more likeley, never, but it's transformative power is essential.

Trying to make it a goal, as in "how can you restructure your financial life to allow you to be paid first", as in, adding to your savings first and paying your bills with what's left, can have a major impact in how we think of money, in a move from fear to action.

This essentially comes down to cutting spending and/or raising income, but the mindset shift can show what is possible.

I think for the younger folks a link to Caleb Hammer's YouTube channel could be a good intro, perhaps Dave Ramsey for the older folks.

[Log]

^Agreed that "pay yourself first" is one of the most important things.

As I was contemplating more about this, the issue that arose again and again is defeating financial nihilism. I think a lot of people these days hold a belief that they cannot and will not ever "make it," so they might as well give up and just live off perpetual debt, or gamble it all on crypto or stock-picking. A HUGE part of this is our cultural obsession with home ownership combined with the housing crisis. Home ownership feeling unattainable leads to a lot of people just giving up.

Even though it might seem like too "advanced" of a financial concept, the JL Collins "rent vs buy" perspective might actually be one of the most powerful insights for combatting this financial nihilism. I think a huge portion of the persistence of the "vibecession," despite great employment numbers and declining inflation, is just because of the cost of housing.

People equate being a renter with being poor, and since they can't imagine saving up some astronomical downpayment, they assume they will always be poor. It's a tall ask to get people to reconsider something that's so culturally ingrained, but if people realize that buying VT or VTI ($90 or $210 at a time) is just as valid of a path to financial stability, those little wins are WAY more attainable. And those little wins being stocked away in a retirement account helps keep them less accessible than savings for a downpayment that might more readily get plundered in a period of hardship or impulsivity.

[RetiredAt63]

If you have such a short time period, maybe have a bunch of web sites to direct them to, broken down by topic*?  That saves the discussion time for basics.  And there was a great presentation at CMTO 2023 about what kind of money person are you?  Thinking about how you approach money is the first step to changing how you approach money.

*If this will be in person, can you buy a bunch of small cheap memory sticks, load your notes and all the urls on them, and hand them out?  I've been to conferences that did handouts that way and it was really useful.  Or if they are mostly accessing the internet on their phones, have one web site they can access that has all the info?

[vand]

I find that if you present from your own personal journey it can make a night and day difference to connecting.  Anyone can read any of the zillion personal finance books out there and know what they need to do, but talking about the mindset you had to personally adopt, the beliefs you had to question, and the changes you had to make can really drive things home - and they don't need to be huge changes, but just a reordering of priorities and adjustment in mindset.. and tie it all back to personal development - you are far from the complete version of yourself, and just like everyone else is on their own journey, trying to figure it out, but still moving forward all the time.

[former player]

Overemphasizing saving for retirement may be a mistake for some people: life expectancy for non-Hispanic Black people in the USA is only 70:

https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/20220831.htm

Something I found helpful was to think about spending in time periods related to when income was coming in: it can be unnecessarily complicated having a monthly budget if you are being paid every two weeks, and so on.  When money does come in, prioritise it:

1.  What has to be spent to get through that period (eg not running out of food or gas for the car before the end of the period).
2.  Can anything be set aside for future bigger purchases (anything from new shoes to a winter coat to replacement appliances) and bills.  The concept of a "sinking fund" is a good one.
3.  Can anything be set aside for future you: retirement, new home, and so on and if so where's the best place to put that money (safety not scams, rates of return, tax benefits of various ways of saving and investing).

[RetiredAt63]

Overemphasizing saving for retirement may be a mistake for some people: life expectancy for non-Hispanic Black people in the USA is only 70:

https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/20220831.htm

I wouldn't plan based on that.  It was life expectancy from birth, and infant/child mortality is (sadly) higher in that community.  Plus a good chunk of the rest was Covid.

Life expectancy from various age starting points is much more useful.  For example, the group that is already 50 will be expected to live longer than the same group at birth, because some have already died from the birth cohort.

[Siebrie]

Maybe focus on 'constantly making life easier for future-you'. Whether that's food prep, having next-size-up clothes for kids, a spare pair of shoes, keeping the house in good repair, not having to go out in bad (and/or dangerous) weather, etc.

[Bee21]

The 'pay yourself first' is an important concept, but I agree, it's hard to sell to someone who is drowning in debt, or really struggling to pay for the basics. I suggest ' treat your savings like a regular bill, which has to be paid first'. This helped me tremendously in the past.

Planning is a key skill, whether it's planning your meals, kids school supplies, Christmas presents, winter wardrobe...i would phrase it as something necessary for a stress free life.

as for budgeting,  everybody knows about it, but it's hard to do consistently. Maybe concentrate on budgeting for the 'unexpected ' aka irregular but normal expenses nobody prepares for well: repairs, replacements, medical bills, presents,  celebrations.

[4tify]

This thread is proving helpful too thanks

https://forum.mrmoneymustache.com/welcome-to-the-forum/your-best-money-saving-hacks/