Many people following this blog have probably heard the quote by Mike Todd: “Being broke is a temporary situation. But being poor is a state of mind.” But is that truly the difference between the two? In that case, how do I tell if I’m actually poor or just broke temporarily?

The Merriam-Webster dictionary defines poor as “lacking material possessions.” So technically being poor could both be temporary or indefinite. Broke, by Webster, is defined as the state of being “penniless”. This, like being poor, could refer to someone who is either poor long-term or a short period of time.

The real question isn’t what poor or broke technically mean, but how the words can impact our dialogue – both internal and external. For me the word broke sounds like I just ran out of money. It sounds different, in my view, from the word poor. Poor sounds like a description of someone’s economic position in the world – more of a long term adjective.

While you can use either one, the word broke seems like a much better description of someone who is working hard in the realm of personal finance but doesn’t have money at the time.

As you go about your daily conversations you will pick up on the dialogue used by people to describe their situation. The people who are truly making strides to improve their situation usually don’t describe themselves as “poor” but see it as temporarily “broke.”

One of the first steps for improving your financial situation is to stop seeing it as a long term situation and start seeing broke as temporary. You don’t want to look back years later and realize you’re been subconsciously programing your mind to hold you down financially.

Here’s a challenge: Stop seeing yourself as poor and start seeing yourself as broke.