| Real Life Strategies for Building Wealth

Does your teen think that you are poor even when you’ve just come back from a nice holiday in the sun? They may be displaying early symptoms of what is known as poverty mentality. And if poverty mentality was only mildly unpleasant and offensive to you, I won’t be telling you about it. Problem is that were your teen to develop a full blown case of poverty mindset, their life can be very badly affected and they are unlikely to reach the potential of their lives. This infliction affects not only their relationship with money, serious as this may be, and pervades other relationships. Here you will learn how to recognise whether your teen has poverty mentality and get ideas about how to help them overcome it. At the end of the post, I’ve included a table offering an overview of the symptoms, knowledge and exercise you can use to help your teen if they are displaying elements of poverty mentality.

The other day, my friend and I went out for a drink. Sitting in the comfort of a trendy wine bar our conversation turned to the most important people in our lives: our children who have all become teenagers.

We chatted about their exams, the A levels they are doing and the future they are shaping for themselves. Then suddenly, my friend looked at me and said:

“You write about money and personal finance, don’t you? Could you tell me why my son think that we are poor.”

“Really?” – was all that I could say.

You see, my friend is far from poor. She has a well-paid job and her husband runs his own business valued in the middle six figures (okay, he has a partner but still a decent business). If I were to guess, I’d say that their combined income, conservatively, is higher that the income of 70% of the UK households.

Still, their son thinks that they are poor and he won’t be able to go to university.

This sounds like poverty mentality, I thought. You see, when people have poverty mentality, it matters little what the facts are, whether money is tight or not, you believe that you are poor and don’t have enough.

Poverty mindset is limiting for adults; it can be debilitating in teens. Because it constricts the opportunities life sends your way and limits your horizons.

Signs of poverty mentality

Poverty mentality can manifest in variety of ways and can pervade all our relationships, not only our money.

Here are the early signs of poverty mentality that you can spot easily. Your teenager may have a poverty mindset when they:

  • Believe that you are poor even when you are not. As I said, my friend and her husband are in the top 30% of earners in the UK and their son still believes that they are poor. Heck, even my son is fearful of poverty.
  • Show fear of poverty. I told you some time ago about my son’s fear of poverty. You’d agree that we can see this in many teens from varied backgrounds.
  • Refuse to have money spent on them. Sounds weird, I know. Most teenagers just can’t get enough of ‘stuff’. Therefore, this sign of having poverty mindset is easy to spot: you’d notice that your teen refuses new clothes, doesn’t want to go to holidays and gets shifty when a note for a school trip is hiding in their bag.
  • Spend erratically. Yes, people having poverty mindset do spend; they even over-spend. Thing is that they spend erratically; they spend just like an over-weight person eats – fast and without regard for quality and need.
  • Don’t spend money on themselves. This can be anything from haircuts to attending paid courses.
  • Display short termism. People with poverty mentality occupy themselves with surviving today; they have not desire and/or energy to consider the future.
  • Low selfesteem. Often poverty mindset and low self-esteem go hand in hand: people believe that they don’t deserve anything good.

There are other signs of having poverty mindset but I think that these would be enough to spot it in your teen.

How to help your teen overcome poverty mentality

Having a poverty mindset can be very limiting; and not only to our relationship with money.

Poverty mentality is also self-perpetuating: believing that you are poor and undeserving brings about lower self-esteem and this, in turn, makes you feel poorer and less deserving. It is next to impossible to snap out of it without support and care from the people around. People who have expressed poverty mentality need help to correct it; it is even more so where teens and younger people and concerned.

There are ways to help the people around you leave their poverty mentality behind. This is unlikely to happen over-night and depends on a combination between ‘education’ and ‘experience’.

Try these:

#1. Get Your Money Numbers Right

Great part of having a poverty mentality is about perceptions regrading money; e.g. people believe that they are poor, that resources don’t allow them to take part in experiences (‘I have no money for this course’, ‘I can’t afford to…’) and this belief has little to do with any reality and facts.

Hence, the first step towards eliminating poverty mentality should be to get the ‘money numbers’ right.

Do your teenagers know the money facts in your family?

I doubt is. In the UK we don’t talk about money much and we certainly don’t discuss money with our children. We think that we protect them when in fact we deprive our kids of the basic money lessons they need in life.

If your teen has money anxieties and poverty mentality the first step will be to sit them down and spell out your money situation in numbers. You can use this post on financial health and wealth as a check list of the numbers to discuss. As a rough guide, I’d go for telling my son:

  • How much we make;
  • How much we spend and on what;
  • How much debt we have;
  • How much is our cash flow; and
  • How much is our family net-worth.

In numbers! Do you know these numbers? If you don’t it may be time to work them out.


Get your teenager (child) to figure out their personal money numbers. How much pocket money they get? What do they spend it on? What is their cash-flow?

#2. Get to Understand Money Better

Don’t know about your children and teenagers but mine certainly don’t understand very well how money works.

Have a conversation about money with your teen and explain that:

  • There is a link between the value you contribute to other peoples’ lives and the money you make;
  • To make money you need only yourself and your skills and competencies. If you develop valuable skills, you’d always make a living (how to know what these skills are is a bit trickier – I, for instance, was told by my family that I’ll never make a living studying sociology and philosophy).
  • Spending money if fine; spending is unavoidable. One ought to learn how to spend it well.
  • Many technicalities that young people don’t understand like mortgages, borrowing, paying off debt and how fast this could go etc.


Get your teenager (child) to read a good personal finance book. I favour the classics and would choose something like The Richest Man in Babylon: written over a century ago and the rules set out still work every time.

Get them to watch an inspirational movie like The Pursuit of Happyness.

#3. Have a Conversation about Poverty

For some reason that escapes me, young people today tend to see poverty as an insult; as something to fear and to be ashamed about.

It is your duty to get them understand that:

  • Poverty is much more complex and that a lot of it is structural. In any case, being poor is nothing to be ashamed of; maintaining the conditions that make it difficult for people to get out of poverty is something that we should object to and remedy.
  • There is a very large difference between seeing yourself as ‘poor’ and thinking of yourself as ‘broke’. ‘Poor’ infiltrates your mind and leaves space for little else that the worry for survival. Broke, on the other hand, is temporary and make you think how to change your situation.

#4. ‘To be’ or ‘to have’

Erich Fromm, one of the well know German psychoanalysts, published in 1976 a book entitled ‘To Have or to Be?’. His idea is simple: our society, and we with it, have become very materialistic and prefer ‘to have’ rather than ‘to be’.

I agree. Raising your children to fall in the group of ‘to have’ people makes them vulnerable to money pathology.

Have you heard about the Joneses, for instance? Yes, the Joneses are very well known in personal finance because of the saying ‘keeping up with the Joneses’. Most personal finance will tell you not to try and keep up with the Joneses but I believe the problem is not your neighbours: the Joneses will always be there and you cannot help comparing yourself with them. After all comparison is the foundation of adaptation and adaptation is how humanity survived so long.

The problem is that we have become people ‘to have’.

Teach your teen that who you are, your standing in the world is not about what you have; it is about who you are. Teach them that experience is better than possessions. Yes, this is difficult in time of iPhones and designer trainers. You still must try: raising your child as a person ‘to be’ can save them loads of bother later in life; and let’s face it – people ‘to be’ are the producers, the ones who drive humanity forward and achieve success.


Play a game with your teen: try to list the possessions you acquired a year ago and you still enjoy? How about six months, three months and one month?

Now try the same with memories of experience?

#5. We Can Thrive on Little

It is true: we have all drifted into over consumption and forget that we need very little to survive and thrive. As my wise aunt used to say, the world would be a much better place if we remember that all we need is somewhere to live, something to wear and something to eat.


Have an adventure where you, as a family, live on little. This can be camping, a retreat of some kind or back-backing for some time.

#6. One Can Survive Without Money

I haven’t tried this one myself but I know that there is a lady who survived without money for years. I also know that some of my minimalist friends live very full and enjoyable lives on very little.

Have a conversation about minimalism with your teen. Experiment.


Ask your teen to come up with ways they’ll survive without money (make it a game and play with them to generate ideas).

Ask you teen to think of ways to make cash for basics (starting with nothing).

#7. Push Against Your Comfort Zone

We humans have a very contradictory relationship with comfort: on the one hand we crave it and, on the other, we despise it since it kills to joy of life.

Still, when push comes to shove, we all settle for comfort (given the chance).

Teaching your teen to push against their comfort zone is an important skill for later life.


Have some ‘go to ground zero’ play. For instance, since your teen has poverty mentality, ask them to imagine that you really have no money at all. What would you do to survive?

Ask your teen to make a list of things that they find very embarrassing. Start doing these things with them.

Here is an overview of the key symptoms you can spot in cases of poverty mentality and the ways in which you can support your teen to overcome it.


Symptom of poverty mentality  




Believe you are poor even when you are not Share the facts about your money; talk numbers: income, spending, debt, mortgage, net worth, cash flow etc. Ask your teen to figure out their personal money numbers: pocket money, spending etc.
Fear of poverty Discuss how money works, what money does in economy and life. Discuss poverty and discuss (and provide example of) people ‘to be’. Design breaks and activities that don’t need money to be fun. Offer experience rather than things. Ask your teen to come up with specific ways to make enough money to survive.
Refusal to spend money on self Discuss the way in which money nurtures life. Get your teen to read a good personal finance book to improve understanding of money. Get your teen to make a list of ten things they’ll do (experience) if money was not an issue. Focus on the top one and help them achieve it.
Low self-esteem Chat about this with your teen. Let them talk – you’d be surprised to hear some of the reasons they have low self-esteem. Be supportive, don’t mock. Ask your teen to do a list of ten things that they find embarrassing. Convince them to try them (with you). These can be simple like changing on the beach (behind a towel), talking to people they don’t know etc.


Poverty mentality can be a problem and this is particularly acute when it affects young minds. Don’t know about you, but my aspiration as a parent is to help my children learn how to live, and enjoy, their lives to the full. Living a life brimming with possibility, happiness and excitement is not possible for people who believe they are poor and undeserving.

In this post, I share the symptoms of poverty mentality and suggested ways to help your teens, or others around you, overcome this affliction.

Do you know anyone afflicted by poverty mentality? Have they managed to overcome it and how?

photo credit: Karl-Heinz Kasper crass (I) 2017-05-31 via photopin (license)