What You Should Know If You Don't Want to Face Poverty

For everyone living in an era of high living costs, even though many may say it's not that expensive, most people are already feeling the pinch from rising fuel and food prices. If you don't switch jobs frequently, your salary is unlikely to see significant increases.

This situation has led many to change jobs often, with some even switching jobs during their probation period. This isn't necessarily wrong. It's evident that the cost of living often rises faster than the income for many salaried employees. So, what can we do? Rabbit Finance invites you to explore the behaviors that lead to poverty.

5 Ways to Escape the Trap of Poverty

Try Everything

Modern individuals who enjoy new experiences often have many options to explore, from restaurants that offer not just food and drinks but experiences, to innovative workout spaces that make exercising fun without being just a gym filled with equipment.

The idea of purchasing experiences can lead us to spend money reasonably, but these experiences are not cheap. The novelty that comes with them often comes with a hefty price tag.

Trying these things and posting photos on Instagram is something you can do, but it's better to pace yourself and try a little each month rather than going all out at once.

Separate Good Debt from Bad Debt

These distinctions create a significant difference between the rich and the poor. The same item can be both good debt and bad debt. For example, if we finance a car to drive to work, meet clients, or gain knowledge for our profession, that car is an asset that generates income. In this case, financing the car is considered good debt.

However, if we buy a car just for leisure or aesthetics without any necessity, financing that car becomes bad debt. Many people deceive themselves into thinking they purchased something to generate additional income, believing they will need it in the future or that they can resell it for a better price. It's essential to reflect on whether these purchases are truly necessary or just desires.

Lack of Financial Knowledge

This is something many Thais lack. Some may know but fail to act on it. Financial knowledge is crucial in a capitalist world where everything revolves around money. Money continuously loses value due to inflation. No matter how much we earn, our money will keep diminishing in value.

For example, a coffee that used to cost 30 baht now costs 40 baht for the same amount. This situation indicates that the purchasing power of our money is decreasing. If we don't know how to invest our money to grow it, how will we have enough for the future?

Save Before You Spend

This is a simple principle that anyone can follow, yet many fail to do so. When we receive money, we often spend it on fixed expenses like mortgage or car payments. These are considered fixed expenses. After that, you should set aside a portion for savings, and the remainder can be used for food, snacks, and other variable expenses. If you don't prioritize saving early, you may find it challenging to save later.

No Life Goals

The lack of success in saving often stems from not having clear goals. Without knowing what you want to do with your savings, saving becomes aimless. However, if you have a goal, such as wanting to invest for a certain return each year, you will be more motivated to save. If you have obligations like mortgages or car payments, these can serve as powerful motivators for salaried individuals to strive and persevere.

Keeping Up with Others

This is a common reason many fall into debt because they want to live like others, especially in an era where celebrities showcase their lifestyles on Instagram, dining at trendy restaurants, flaunting designer bags, trying on clothes from exclusive shops, and using various services. Little do they know that many of these celebrities may not be spending their own money but are instead sponsored to eat, travel, and use services as part of marketing campaigns. If you can't afford to live like them but try to do so, you will inevitably fall into debt.

At this point, you should be aware of what you expect and what you have. Any expectations you have should be adjusted to your reality to help you escape the trap of poverty. And for those who are not yet in dire straits but neglect these matters...

You could still end up poor without realizing it.

Thank you for the information from rabbitfinance.com