Working Poor | Definition

/ˈwərkiNG po͝or,pôr/

The working poor refers to individuals that participate the labor force for at least 27 weeks during the year, but their income falls below the accepted poverty level.

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Did You Know

According to the Bureau of Labor Statistics, in 2020, more than 6.6 million workers were considered part of the working poor.

For many people, the phrase "the working poor" may not be familiar, but unfortunately, it is a reality for far too many individuals and families. Being part of the working poor means that something that shouldn’t be the case, that is struggling to make ends meet, is very much a reality even though you’re working one or even multiple jobs. 


Hovering at or near the poverty line while working hard to earn a living and cover basic needs is a difficult situation to be in. However, listed below are three steps you can take if you are part of the working poor and want to improve your financial situation. 


Who are the Working Poor?


The phrase "the working poor" refers to individuals who are employed but still struggle to make ends meet. The working poor comprises individuals who earn a wage but can’t stretch their paycheck to cover the increasingly high costs of daily living, that is, food, housing, basic transportation, healthcare, and other core essentials. As a consequence, the working poor often live paycheck to paycheck, with limited access to resources to improve their financial situation.


4 Tips to Improve Your Finances If You Are Part of the Working Poor


#1: Create a Spending Plan


One of the most important steps you can take toward improving your finances is to create a spending plan, also known as a budget. A budget is a financial plan that outlines income and expenses. A budget is a roadmap of sorts that helps you understand where your money is going and identify areas where you can cut back or ramp up investment.


couple worrying about bills


Once you have a clear idea of your expenses, look for any low-priority budget areas that can be trimmed. For example, while food as a whole can't be eliminated, you might be able to save money spent on take-out by cooking more meals at home. Be realistic when creating your budget, Baby steps, no matter how small, can give you the momentum to lower expenses and increase savings.


Recommended Read: How to Create a Basic Budget in Three Simple Steps


#2: Increase Your Income


One of the challenges of being part of the working poor is earning a living wage. While it may be challenging, increasing your income can help improve your financial situation. 


Potential opportunities for increasing your income include taking a second job, starting a side hustle, and freelancing. If your apartment doesn’t have a second bedroom to rent out, consider making your home or couch available for rent when you’re away for a night or two. The goal is to get creative and see where you can leverage assets or talents for increased income.


Man working on side hustle


Recommended Read: 4 Tips to Choose a Side Hustle


#3: Seek Financial Assistance


There are many programs and resources available to help the working poor. Consider seeking financial assistance if you are struggling to make ends meet. Look for local resources such as food banks, housing assistance programs, and healthcare clinics. 


You can also consider applying for government assistance programs. These programs can provide a safety net to help you cover your basic needs and improve your financial situation.


Recommended Read: 3 Hacks to Help You Get Ahead on Any Budget


#4: Learn Money with CapWay


CapWay is a digital bank that offers a debit card without fees, its Money Goals feature helps people achieve their financial goals, and they have a Learn Money section on its website and mobile app to help people to improve their financial knowledge. 


Financial literacy can help individuals reach their money goals much faster. Plus, being financially literate can help improve financial habits, make more informed decisions, and become financially stable. 


You can learn about money and bank smart on the CapWay website or mobile app. 


The Money Wrap-Up


Being part of the working poor is challenging, but there are steps you can take to improve your financial situation, like creating a budget, increasing your income, and seeking financial assistance. These small changes can help you achieve financial stability. Remember that improving your finances takes time and persistence, but it is possible. By taking these steps, you can work towards an improved financial future.

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