Financial Advice for the Working Poor

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    Tax Breaks

    • When you are a member of the working poor, you can take advantage of a few tax breaks. One of the most attractive breaks that you could have access to is the earned income tax credit. The earned income tax credit is a credit that is available for people with low to moderate incomes. If you qualify for this credit, it reduces your tax liability on a dollar for dollar basis. If you do not owe much in taxes, this credit is actually refundable, which means that the Internal Revenue Service will send you a check for what they owe you.

    Setting Goals

    • Regardless of how bad your financial situation seems, you can always improve it. Part of improving your financial situation is setting goals to work toward. Until you set some financial goals, you will not have any purpose in your daily actions. For example, if you want to save enough money for a down payment on a house, you need to set a goal and work towards achieving it. Planning out your future financial moves can make a big difference in your current actions.


    • When you are financially lacking, you may feel it is impossible to invest. While it may be difficult, it is still possible to put your money into investments. The only two ways to earn money are to earn it yourself through work or to put your money to work for you. If you are poor, you might want to get both methods of earning money working for you. You can start out small by putting your money into CDs or bonds. You could then move into investing in mutual funds or stocks.

    Handling Debt

    • When you do not have a lot of money, you may feel tempted to borrow money to meet expenses. You might open up a few credit card accounts and proceed to max them out. If you have already done this, you need to apply any extra money that you have to paying off your debt. This can free up money every month once you pay off your accounts. If you have not yet fallen into the trap of accumulating debt, do not let yourself. Avoiding debt is one of the best things that you can do for yourself when you do not make much money.

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