Some people feel like they can never get ahead in life. If you’re living paycheck to paycheck and struggling to make ends meet, you’re not alone. The majority of working-class people in the United States say that even a single missed paycheck would bring them to the brink of financial ruin. Are people that bad at financial planning, or is something else at play?

Today, we’re asking the question: can you budget your way to prosperity?

You Can’t Invest What You Don’t Have

When you look at someone’s income in black-and-white terms, it might be easy to say, “oh, you could invest a few bucks from this paycheck into a mutual fund.” Seeing the raw numbers is deceptive, though. Many people in challenging financial situations don’t have the best grasp on investments. Even if they do, they might not have the desire or even energy to invest what little spending money they do have into long-term investments.

It can be easy to be dismissive of this attitude. Seeing a person in a tough financial spot taking their kids out for ice cream could elicit a scoff from some financial advisors. Why not invest that money instead to try to start reversing their economic fortunes? However, poor people deserve happiness as much as everyone else, so begrudging them their simple pleasures is usually more cruel than helpful.

Income Disparity

Someone who works for an hourly wage might not invest enough money to change their fortunes in any event. There is a significant disparity between the income of people who work in offices and people who work in retail and restaurant jobs. That disparity is more profound when you look at things like purchasing power and the ability to invest.

This is to say, even if someone working for minimum wage can scrape together a bit of money to invest, that investment might be too negligible even to consider. Why invest a few bucks every paycheck to see a few cents in return? This can feel more hopeless than empowering for many hourly workers.

The Bright Side

However, budgeting, investing, and financial planning are still all great goals for anyone looking to take control of their finances. The important thing is to tailor one’s expectations to their income. No, you can’t budget your way to prosperity if you’re not currently making much money. However, you can budget your way to better financial literacy and hopefully a bit more money to stash into your savings account!