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There are many financially illiterate people in the U.K who abuse different financial terms that they come across with. These people do not know the true meanings of the words that they use in their everyday activities and as such, they end up using them wrongly. In a world where most people are well educated, it is surprising to see some people misusing financial terminologies. Being broke and being poor are some of the terms that are mostly abused by peoples. In this article, we will look at the differences between being broke and poor.
People’s financial attitude determines their financial positions in the society. There are people who spend most of their lives working very hard but because they have the wrong financial notions, they end up remaining at the bottom of the financial ladder. These people have philosophies and beliefs that hinder them from achieving any meaningful financial achievement thereby remaining poor for the rest of their life. Therefore, it is important to understand different philosophies and terminologies that are used in personal finance. When you do, you will not only be able to express yourself well but also, you will be able to deal with different financial issues that may arise in your life in the right manner.
Being poor and being broke are two different things that many people in the U.K confuse. In essence, being broke is a situation where one has no money to address an immediate financial need. However, you may be broke but not poor and on the other hand, you can be poor without necessarily being broke. Being poor can be defined as a condition where one has no money to meet their basic necessities. This is very depressing as it degrades someone’s dignity. No one desires to be poor. Also, you may be classified as poor when you have insufficient funds to meet all your immediate basic needs.
You may however be poor and broke and the same time. In this situation, you are living in the first class poverty as you no not have money to meet your basic needs and have no hopes to find it. This is the situation faced by those who live in the bottom most part of the financial ladder as they are broke at all times. Therefore, it is important to tell the difference between the two.
Another thing to note is that you will not be broke so long as you have money to meet your immediate basic needs. However, this does not mean that you are rich since you do not have more than you need. Some poor people are never broke because their incomes are always enough to meet their basic needs. In addition, these people live within their means thereby being able to settle their bills and meet their basic needs. There are times when you will find rich people becoming broke because all their money is tied in investment plans that they have. This means that they do not have money at the moment but when their investments make some returns, they will have money.