If you were in poverty, How would you get out of poverty?

Question

You have a lot of debt, which you can't really pay off until the next few years anyway, and you have your current living expenses. You are going to school so that you can get that higher income job, but it's really hard because of your current status. What would you do?

Answer 1

Just keep focused on the goal. I was in poverty with 2 kids 10 yrs ago. We moved to a big city with what little money we had. We hung in there and things got better. Now we own our own business and have a VERY nice life. Bills come and go the main thing is to buy food first and house yourself.  

Answer 2

A. Get an education that will actually get you a job.  No underwater basket weaving if you catch my drift.

B. Get a job now.  I worked full time all through college.  It wasn't fun, but I got through.

C.  Make a plan and start paying down you debt now.

1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :

Debt #1 (highest interest): minimum payment+ extra payment

Debt #2 (middle interest): minimum payment

Debt #3(lowest interest): minimum payment

Debt #1: paid off

Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment

Debt #3: minimum payment

Debt #1: paid off

Debt #2: paid off

Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money. Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

Answer 3

Rent a room in someone's house to live in.  You can get a post office box for privacy regarding your mail.

Rent the room near campus/work and figure out how to take the bus or ride a bike.  Sell the car.

Get a part time job.  

Seriously consider putting off school for another year.

Learn how to live on cheap food.  No McDonald's, nothing.

Buy clothing at goodwill.  Limit yourself to 10 days of clothes and good walking shoes.

Figure out what got you owing so much debt and STOP doing it.