What is the poverty trap and how to get out of it

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

When work becomes torture, and there is always no money, there is only one way out - to overcome the habit of being poor.

You are tired of work, and every day you work harder and harder, not paying due attention to personal hobbies, relationships and leisure … Salary finally meets your expectations, but you just want more, because expenses are growing every day.

No matter how much you earn, there is always the risk of falling into a poverty trap.

What is a poverty trap

This concept came to us from the English language, where the phrase poverty trap is used Do Poverty Traps Exist? Assessing the Evidence to describe the economic phenomenon when a person stops working in order to receive welfare benefits. There is no point in his work, since often the salary level is even lower than the unemployment payment. This poverty trap makes each generation poorer and poorer, and there is essentially no way out of poverty.

However, now the poverty trap is understood as a broader concept. It does not describe the amount of money and the presence of property in a person. Both the unemployed and the millionaire businessman can fall into the poverty trap.

The problem is not in the absence of savings on the account, but in the wrong perception of money and ways of earning. No matter how much a person earns, it will never be enough for him. This is the trap.

Who runs the risk of falling into this trap

Low-skilled workers

Any work ennobles a person, but not any one is paid for. The Poverty Trap: Definition, Impact & Solutions. Inquiring about the level of salaries, for example, of builders in Moscow, you can find 35 thousand rubles a month as a builder, or all 100. Of course, in other regions the salary can be much lower, although the basic duties of an employee do not change.

Not every laborer in the country falls into the poverty trap. An experienced employee knows how to find the most profitable option that guarantees a good income. But not everyone has the necessary experience and time to find a good job.

This begs the question: How does this relate to the poverty trap? The fact is that children born in a family where their parents performed low-skilled work are more at risk of falling into the abyss of poverty. In 2015, scientists from the University of Massachusetts conducted an experiment, during which it turned out that poverty is inherited Poverty shapes how children think about themselves.

The problem arises not only with finances, but also with their misperception. Growing up in poor families, children do not even think about the fact that work can be enjoyable, because its main goal is solely money. Growing up, a child can follow in the footsteps of his parents and choose the profession with which he is already familiar.

Low-skilled labor is directly related to the lack of higher education. It is often possible to observe such a picture when a person, not being able to study at the university, eventually finds a low-paying physical job in order to provide for himself and his family. That's all: the trap has slammed shut, and now it is much more difficult to get out of it.

People who spend their free time on useless rest

Actually, any vacation is good. And yet there is a difference between a one-off "lazy" weekend and a regular waste of free time.

And after all, the problem is not even that there is no money for healthy and active rest - rather, there is not enough energy for it. So it turns out that instead of a more labor-intensive pastime, we choose something affordable and simple: sit with friends in a bar, watch a new series from Netflix, or just lie on the couch, pensively staring at the ceiling.

Here is a vicious circle for you: you want to develop, which can contribute to the improvement of well-being and material situation, but only there is neither strength nor time. This means that there is no development either. Isn't it a poverty trap?

Having given birth to a child at a too young age

For a good upbringing of a child, just the desire to be parents is not enough. Nevertheless, this does not prevent many young girls at their own peril and risk to give birth to a child, not having enough funds to support it. And this is just one side of the coin.

On the other hand, a girl does not have the opportunity to get a higher education, find a good job that could provide her with a comfortable existence. So it turns out that having a child in her arms, a young mother automatically falls into the trap of poverty.

After leaving the decree, the situation does not improve: the girl simply does not have work experience, and sometimes even a diploma of higher education, which significantly reduces her chances of getting a good position.

As a result, we get another cell in the trap, from which, of course, you can get out, but it will take a lot of time and effort.

Living their whole lives in a poor country

A country, like a person, can fall into the trap of poverty. A bad economy, corrupt leaders, unstable trade - all this leads to the fact that an ordinary citizen who has lived his whole life in such a country automatically falls into poverty.

Together with this, he is surrounded by people who, like him, try to survive, not live, earn as much money as possible in order to finally "redeem" themselves from captivity. And thus more and more driving yourself into a vice.

How to get out of the poverty trap

1. Change the attitude towards money

Many of us begin our adult life with literally nothing. We are happy about our first salary and we understand that our efforts were not in vain: now we can make all our dreams and plans come true. Yes, only in proportion to the growth of wages, our requests also grow. And there is nothing wrong with that, on the contrary, striving for the best is a huge plus that allows a person to develop. Money is a good motivator, and yet it shouldn't be the main goal of the work.

One thing to realize is that you are managing money, not the other way around. And only their number depends on you. You can waste everything on empty entertainment, and then complain about low salaries. Or you can skillfully manage finances, saving money or investing it in the development of your own business and yourself. And in fact, and in another case, the amount of funds can be absolutely identical, only the correct handling of money is a guarantee of their increase. So don't start by criticizing your own performance, prices, and poor authority. Start with yourself.

2. Take into account even small expenses

On the way to work, you definitely need to go to your favorite coffee shop near the house. And after a hard day at work, you really want to enjoy something tasty, because you deserve an award. Everyone has their own little traditions, habits and whims, which seem to take a small amount of money.

The key phrase is “it would seem”. Have you ever tried to calculate how much money is spent per month, for example, on your favorite morning coffee? Or all the cute knick-knacks you couldn't get past? How much did you spend on going out to cafes with your friends?

One-time petty expenses do not affect your finances too much. If they were one-time … It seems to us that if we spend 100 rubles today on some whim, it will not affect the wallet in any way. But even with such a minimum spend, you are already losing 3,000 rubles per month.

The best way to control your own finances is to keep a clear budget. Whether it's special applications or a notebook where you will enter absolutely all expenses (even the smallest ones) - any of these options will help you at least realize where the money is going.

And then there is little to do: learn to control the inner shopaholic and finally free yourself from the shackles of poverty.

3. Stop waiting for a miracle

The thought that someday there will be a unique chance to become rich in just a day, perhaps, visited many of us. Buy a lottery ticket for 50 rubles and win a million. To inherit a huge house in Norway from an unknown relative. Earn a promotion at work and earn enough to be enough for absolutely everything your heart desires.

Of course, there are situations when someone is really "lucky". But after all, instead of believing in luck for years, you can achieve career success on your own.

Your earnings depend solely on you. You should start small: learn to save money, or at least not spend it on unnecessary things like lotteries that promise you mountains of gold. Strive for professionalism at work, do not get into loans for the purchase of status things and do not hope that someone will make you rich - only you can do that.

4. Do not be afraid to take risks

The fear of trying something new, deviating from the usual course, the inability to take risks correctly makes people either do nothing or commit rash acts. In either case, a person still remains trapped: because of his own fear or irrational attempts to get rich quickly.

The risk is not to quit a permanent job, get credits and rush to Bali to be creative. Risk is a smooth, rational change in your life and habits.

You can go to advanced training courses or turn a hobby into a favorite thing and a way to earn money. The main thing is not to rush, not to put money in the foreground, but simply to enjoy the first changes for the better that you bring into your life.