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Escaping debt and poverty in 2014

By Kemberley Washington ·
Thursday, January 2, 2014
Posted: 12 pm ET

If you were broke all throughout 2013 -- living from paycheck to paycheck -- it is time to do something about it in the new year.

Some of us think we are meant to be successful in many areas of our lives but simply mumble "that's just the way it is going to be" when thinking about our debt and other financial disappointments.

Perhaps we have a long family history of failing to build up adequate savings. However, you don't have to remain broke just because prior generations in your family failed to be frugal, or to save smartly. Enough is enough: Plan your way out of poverty.

You can create great wealth for your family through simple moves, such as saving for your children's college education through a 529 plan, or investing in low-cost index funds while saving for a future home purchase.

Stop the waste

It is amazing how much money we waste as a nation. The harsh reality is that we are blowing cash on things that will not matter in the next few months, let alone the next few years. The only way to stop being broke is to stop wasting.

Think of ways to reduce waste and cut back on expenses that are not necessary. If you go to a movie every week, try skipping that expense at least one time in each month of 2014. If you haven't saved money in a Roth IRA, consider taking a few hundred dollars from this year's clothing budget and earmarking it for retirement.

When building a secure financial future, time is not on our side. The only way to achieve financial goals is to start saving today. This means a new way of thinking and acting in 2014.

To walk the pathway to wealth, start thinking wealthy. This begins with saving today so you can store wealth for generations to come.

Kemberley Washington is a certified public accountant and professor at Dillard University in New Orleans. She writes a personal finance blog at Follow her on Twitter or connect with her on Facebook.

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October 18, 2014 at 2:09 pm

A lesson from the Grate Depression. Mom was an English teacher in PA. From the age of five I heard, "waste not want not". It didn't impress me until later in life when I learned the importance of controlling my spending habits. I learned the hard way. My husband and I made some poor business decisions and was scammed causing us to go into foreclosure. We had our cards maxed. I wish I could say that we bought extravagant purchases, but we didn't. We bought a refrigerator, washer, hot water boiler, a roof, etc. All of the above had broken down within months of each other. We found help and kept our home. It was way to close for comfort. We now get advice from a professional about our business and we use no credit cards, period. We are out of debt and have saved a small cash reserve. So, take mom's advice, "waste not, want not.

Nikki S.
February 08, 2014 at 2:36 pm

This article seemed pointless to me. If someone is living "paycheck to paycheck" they generally are struggling to put food on the table much less having the money to go to the movies every week. I was looking for an article with some solid, factual advice geared towards families who are living from check to check without a safety net.

Jan Mills
January 14, 2014 at 11:17 am

Great Read. Agree with you about wasteful spending. To help in the wasteful spending consider the following. Make a list of say 10 items that you would like to have in 2014. Then watch for sales or request as gifts. Rem if sale items needs to be at least 30% or greater, implore this method to see if this will help you stop wasteful spending.

January 10, 2014 at 9:57 am

I totally agree that we must stop wasting. I have been working for YEARS and my savings are not what they should. I have always had the mindset that if I wanted something I was going to buy, whether I needed it or not. Of course most of it I did not need. Just a waste. I am now more conscious of how I spend my money, mainly because I am nearing retirement age. I only wish i have been smarter with my money.

January 03, 2014 at 8:09 am

How about saving some money on "body art"! Less Is More.