Why People Who’ve Had Money Problems Often Give the Best Advice

By the author of The Ultimate Guide to Frugal Living and What to Eat When You’re Broke

Are you having money problems and don’t know where to turn for help? Maybe you want to discuss it with that super-responsible pal who has never paid a late fee in her entire life. Perhaps you want to talk to a professional financial advisor. Well, I’m here to tell you that your very best source of information might be a broke person or someone who has had a history of money problems.

A person who has gone through bankruptcy or lost a home or suffered terrible financial problems can not only truly empathize with your situation. They can also tell you about the mistakes they’ve made or how they recovered from these problems.

And what’s more, nobody ever asks them their opinions because most folks have written them off as “bad with money.”

Personally, I’d rather learn from the mistakes of someone else than talk to a person to whom money stress is merely theoretical. I know this from my own difficult experiences, from literally digging through a dumpster to feed my toddler – I can tell you how to survive being broke a lot better than somebody who has only read about being broke. And I won’t judge you, either.

Here’s what got me thinking about this.

Okay, confession time.

I freaking LOVE The Daily Mail. I know, I know, it’s not great journalism. It’s not serious. There’s a lot of fluff. But sometimes we need a little bit of fluff in our lives just to get away from the grim realities of the world. Shake your head and look at me with scorn, but it’s free and it’s not hurting a soul. And sometimes I get awesome article ideas from there.

Take last week, for example.

Some “influencer” from Australia is now trying to tell people how to manage their money after it was revealed that she filed for bankruptcy several months ago. There was an all-out verbal melee in the comments and in social media as angry readers scoffed at the idea of taking advice from a bankrupt individual who still appears to live the high life in her online photos. But I immediately disagreed with those people in the comments section because I’ve been where that influencer is right now. (Minus the awesome bikini bod.)

Now, is that woman’s advice great? Not that they showed in this article. In fact, she was standing near some outrageously expensive blueberries, like they’re a good idea. But would I write off everything she has to say? Absolutely not.

I bet you that she knows exactly what financial mistakes led to her bankruptcy. I bet she is eager to recoup her losses and do better the second time around. And therein lies a source of wisdom just waiting to be tapped if everyone wasn’t gleefully mocking her for having money problems and seeming to be clueless.

Advice from a former flat-broke person

This is all a guess on my part. I don’t know the woman from the Daily Mail. She might be incredibly vapid and have no self-awareness whatsoever. But a lot of folks who’ve been down the dirt road of poverty can really be helpful. Way more so, in fact, than those who have never had a bank balance of lower than four figures in their entire adult life.

If I were to give advice to people struggling with their finances right now, based on what I learned in the past, it would be the following.

1.) Everyone makes mistakes.

First of all, you need to let yourself off the hook a little. Everybody, everywhere, has made a financial mistake at some point in their lives. They may not have been as strongly affected by it because they have a healthy savings account or because it was a smaller error. But we’ve all spent when we should’ve saved, bought something frivolous and useless, or paid one thing when we should’ve paid another first.

Financial mistakes are financial mistakes, and they happen to us all. You’ll never move past if it you don’t a) forgive yourself – you’re human – and b) stop considering yourself as “bad with money.” Our thoughts can manifest into a belief that continues to sabotage us as time goes on.

2.) Do damage control.

Okay. You’ve made a mistake (or even a whole series of them.) Let’s take a look at your budget. Let’s see where you can cut, whether this is popular or not. Let’s see how you can staunch the financial bleeding and save what you can.

3.) Cut your losses.

There are some things that cannot be saved.

Take my house back in Canada, for instance, which I lost to foreclosure. And my car went right after it.

I was in a situation in which there was no feasible way whatsoever for me to catch up with these payments. By the time I was able to emerge from my grief (it was after the loss of my dad), it was too late. So I had to cut my losses. I had to stop making house payments and put that money toward a new place to live – after all, being homeless would be even worse. I had to stop making car payments and put that money toward a cheap used vehicle that probably wouldn’t last long but would get me to and from work. I had made terrible mistakes, but I could cut my losses and move on from them.

I had to let those things go in order to keep the situation from getting worse. Any additional money I put into it would be like spitting into a dry well. There were no benefits for my children and me.  (Here’s a piece I wrote about what to do when you can no longer pay your bills.)

4) Learn what is actually a bargain

Broke people know that just because something is on sale doesn’t mean it’s a bargain. First of all, is it something you actually need? Will it take away from spending money on other things you actually need? Is it still an expensive thing for a broke person to buy?

For example, ground beef is always going to be cheaper than an expensive cut of steak, sale or no sale. You might be able to get 3 meals worth of another meat for the price of that steak.

If your broke bestie would be appalled by you buying it, you may need to look at whether it’s really a good deal or not.

5) Figure out how to be happy with less.

If you are constantly bemoaning what you can’t afford or that you have only enough money to cover the very, very basics, you’re not going to be a very happy person. I know being broke can take some getting used to, but there are so many free things, and so many ways to spend time instead of money, so many ways you can teach your children important values.

Is living paycheck to paycheck fun? Absolutely not. But that is the macro. When you boil things down to the micro, a trip to the library results in a stack of great books (including that one you’ve been dying to read) just as much as does a trip to the bookstore. Are PB&J sandwiches for supper awesome? Not if you eat it hunkered over your kitchen sink. But if you take the kids outside and sit on the grass and treat it like a picnic, it’s a lot more pleasant. Coffee on my own patio may not be as exciting as a $7 latte made by a barista and served to you on hard little chairs on their patio, but the seat is so much comfier, and to be honest, I like my homemade lattes better.

If you are constantly thinking about what you don’t have, you miss out on enjoying the things that you actually do have.

Who would you take financial advice from?

If you were looking for financial advice, would you consider taking it from a person who had lost everything or had suffered some type of financial catastrophe?  Or would you rather take advice from a person who totally had their shizzle together? It’s a genuine question – where do you think the best advice comes from?

Let’s talk about it in the comments section.

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