[djcapelis]

One reality show I would really like to see would be about sending entitled people into low income neighborhoods so we can all watch them realize just how hard working some people are and just how well most people manage their money. Maybe then they'd stop saying misinformed stuff like "all that person really needs is someone to help them with a budget." A budget helps you cut excess spending. There's not a lot of spending in low income places almost by definition. There is not a lot of excess.

Deeply in debt people typically don't come from low income neighborhoods, they come from the middle class. Low income folks can't get credit that easily, even when credit was easy.

Most poor people I know work amazingly hard and manage their money well.

[jdietrich]

I grew up in one of the poorest parts of the UK. After leaving school, I volunteered for an advice charity for eighteen months, spending two and a half days a week going over (predominantly poor) people's finances with a fine-toothed comb.

Out of the hundreds of people I worked with and kept extensive records on, I found four who were in serious financial difficulty through no fault of their own. Four. I saw people manage perfectly well on £9000 a year and people on £40,000 a year hiding their car from the bailiff.

Correlation between quality of life and income was remarkably weak - the ability of clients to stretch their income and conversely their ability to fritter it was often astonishing. Middle class clients took on unmanageable mortgages and racked up huge credit card bills. Working class clients took out payday loans every week, bought consumer electronics on expensive hire-purchase and spent their housing allowance at the pub. I did observe one strong correlation - the more serious someone's financial problems, the more likely they were to walk out through boredom or frustration, or become abusive when it became clear that I could not fix all their problems.

Of course, we have a welfare state. From my perspective, the political environment in the US seems to be dominated by people who actively hate the poor. It may well be the case that Britain is exceptionally supportive of the poor, or that American society is exceptionally hostile towards them.

[btilly]

I know a lot of poor people who work hard and manage their money well. I also know a lot who could save themselves a ton of money with obvious (if not easy) steps like quitting smoking.

[timsally]

Quitting smoking may seem obvious, but it's important to consider the context. Middle class people grow up in homes that are very anti-smoking. In the rare case that a middle class family isn't anti-smoking, middle class schools certainly are. Hell, I was indoctrinated with anti-smoking feelings starting from age 10 in school. Whereas a lot of poor people are probably being given cigarettes at age 10. Combine this with the highly addictive properties of cigarettes and I'm not convinced quitting smoking is a reasonable money management strategy to suggest unless we provide some sort of support program or infrastructure. If there are free programs available to teach how to fight addiction, then sure I'm on board.

[btilly]

I wasn't claiming that quitting smoking is a reasonable money management strategy. But a pack a day is something like $1500/year straight to your bottom line. No matter what your feelings about tobacco, it is an obvious luxury that you can live without and save a lot of money.

This relates to a very important distinction between being working poor and impoverished. And it isn't money. It is whether you've given up.

Someone who is working poor may objectively have it hard, but they feel in control of their lives. They can and do plan for the future. They save up for things. They anticipate what can be anticipated and make plans. I've seen people like this calculate the cost of smoking, and choose not to because they can't afford it.

Someone who is impoverished believes that their life is hopeless. Bad things are going to happen to them. They might have some influence over which bad things, but it is going to be bad. So why bother? Live for the moment and tomorrow can go hang. Smoke another cigarette, hope for some cheap booze (or other substance) tonight, it is all hopeless anyway.

Someone in the latter frame of mind knows that payday loans are stupid, but doesn't care. Because it is bad in that nebulous future that they already know is going to suck, and how much worse is it really going to get?

Anyone who talks about the poor being good with money who does not understand this critical difference between being working poor and impoverished is missing a very important point.

[timsally]

I agree with your distinction and it is an important one. It is also important to define the function by which one becomes either a part of the working poor or impoverished. I argue it is a function of personal motivation, race, sexuality, religion, and a myriad of other factors. Indeed, pointing this out was the point of my previous exposition regarding smoking. I'm wary of those people that place too much weight on the personal motivation term in the above equation.

[hugh3]

One reality show I would really like to see would be about sending entitled people into low income neighborhoods so we can all watch them realize just how hard working some people are and just how well most people manage their money.

That would indeed be interesting if it were true, regardless of your snarkiness. I'd be interested in seeing a show just like that regardless of how it works out.

[tesseract]

Secret Millionaire?

[kamaal]

Yes, that is always the case. Poor people often work hard and save money for many reasons. One obvious reason is they really have no way out. If you are given one and only one chance to do something, you are left with no choice but to do it well.

The other aspect I see is upbringing, when all you see around is poverty and and way out being working hard, you grow a natural tendency to think of hard work that way. You also learn to live frugal, and manage even with little resources. Later on life when you earn well, these habit help in saving and making proper investment decisions.

On the other hand people raised in spend thrift environments, try to match their living accordingly. For example even if they do no have money they try to buy things through debt and credit.

Saving and making investment decisions overtime make you rich, this is obvious and nothing surprising. But people rarely realize this.

[stretchwithme]

Why is someone able to provide sensible financial advice considered entitled?

There are plenty of people who started with nothing and who, by being sensible, worked and saved and became financially successful.

hugh3 probably had such a person in mind, not someone with a trust fund who has learned to stay within their allowance.