Growing Up Poor: 4 Biggest Money Lessons I Wish I Learned Earlier in Life

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Certain aspects of managing money seem simple on the surface, like setting up a checking account or maintaining a good credit score. However, if you take a peek beyond the surface, into the granular world of details, things feel more complex and laden with questions.

For instance, you may know that you need high credit to eventually buy a house, but do you know what factors impact your credit score? And even if you passed a credit check, would you be prepared for the taxes and insurance payments needed to maintain that house? 

These can be tricky questions, even for people whose backgrounds are full of advantages. The quandary can be compounded for people who grew up in poverty or whose families weren’t able to prioritize teaching financial literacy. People in these circumstances are challenged to play catch-up and learn these pivotal lessons as they enter adulthood. 

How To Make Larger Purchases

Today, Rene Denfeld is a licensed investigator and an acclaimed novelist. She remembers growing up with a single mother who taught her crucial aspects of in-home money management, specifically shopping on a tight budget. 

Denfeld said she learned how to stretch a dollar for food; however, she didn’t learn anything about making larger purchases such as a home or car — for the simple reason that the family couldn’t afford them. Engaged in a survival mindset, there was simply no time to delve into the more complicated aspects of financial literacy. 

“I never learned anything about interest rates, or how to invest, or how to make bigger decisions about money. Life was always a day-to-day struggle, and the mindset was one of survival,” she said. “It [wasn’t] just about what I didn’t learn, but also about a survival approach to life that didn’t prepare me financially.”

When Denfeld had the opportunity to buy a cheap house while in her early 20s, she encountered a number of pitfalls. Accustomed to living in places that were owned by other people, she wasn’t aware that owning a home meant paying taxes and insurance. Since she made this purchase before the age of the internet put broad swathes of highly specific information at your fingertips, it was simply harder to access the right knowledge. 

“Nowadays, you can look stuff up online, but back then, if you didn’t take a class or learn somehow, you could be in the dark about a great deal,” she said. “Even today, with the information online, it can be very complex and confusing to navigate money. Those of us raised in poverty learned how to stretch a meal. We didn’t learn to ask the right questions when signing a loan or buying a house or car.”

Spotting Scammers

Unfortunately, there are predatory people and agencies who will take advantage of people who are still gaining financial literacy. When Denfeld struck out on her own, she didn’t know what an interest rate was and unknowingly signed up for credit cards with predatory rates. “I got fleeced on the regular,” she said. 

The exploitation of people without financial literacy can take many forms, including rent-to-own furniture stores with exorbitant interest rates, as well as used car dealers who use similar tactics. It’s also not uncommon for people to buy a condo thinking it’s a cheaper option than a house, only to discover that there is an HOA and their rates are about to increase.  

Denfeld said that in her own gentrifying neighborhood, she’s seen real estate agents prey on elderly residents who might have inherited their homes or purchased them when housing was more affordable, trying to get them to sell their homes for cash. Without understanding how real estate works, these residents can be conned by someone who tells them that selling for cash is a superior option.

“It’s not people being foolish. It is them never having been taught,” she said. “We don’t teach this stuff in our schools, which is really a travesty. In general, I think we have a lack of compassion, even scorn, for poor people who don’t understand money. But how would we? People … are financially literate because they have money to practice with. It’s very difficult to teach people skills without the tools they need to practice. It’s like teaching someone to fish in a pond where you know there are no fish.”

Living Outside of the Emergency Mindset

Growing up, writer Letitia Trent never saw her parents use a checking account or a credit or debit card. Money was tight, and concepts like budgeting, saving, investing and retirement weren’t discussed. 

“Instead of having money set aside for specific things, it was more about what we could afford to pay [at] that moment,” she recalled. “We did not go to the doctor unless it was an emergency, and I did not go to the dentist until I was an adult, so saving up money or budgeting for these things was unheard of.” 

The family prioritized emergency care, such as going to a free clinic to get a rotten tooth pulled. Living in a more emergency-oriented or need-based approach impacted many other aspects of Trent’s life, down to not participating in extracurricular activities at school since the family didn’t have reliable transportation and the extra expense wasn’t possible. 

“I never learned to prioritize things like health, self-care or personal development, as these things simply weren’t possible,” she said. 

Even as an adult, Trent had to unlearn this mindset around money. She said she had such low expectations and little knowledge around money that even setting up a bank account was intimidating. Though she didn’t set up a retirement investment account until she was in her mid-30s, it wasn’t a lack of interest that stalled her — she was scared she wouldn’t have enough money to save. 

Knowing that she was on her own financially, she feared running out of money. Trent remembered passing on opportunities through school or her writing career because she feared that she wouldn’t have enough money to partake in them fully, or would spend too much, which would devastate her financially. 

Small Steps Can Make a Big Difference

As she’s gotten older, Trent has found meaning in the process of starting a checking account and knowing how much is in it. She’s also started to prioritize savings, investments and retirement — literally teaching herself the ins and outs through online searches. 

She also uses budgeting apps and a banking app to help her stay aware of her spending and modify anything if necessary.

“Only recently have I started saving a larger chunk of my paycheck and gotten over that fear of not having enough here and now,” she said. 

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