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Ten Reasons You Are Always Broke
& What You Need to Do to Fix It
Are you always broke? Are you up to your eyeballs in debt? Are you discouraged because you don’t think you will ever be able to do the things you are dreaming of doing in life? I hear you, I have been in all these situations and it is totally discouraging.
I have also gotten myself out of these situations as well. I won’t lie, it’s hard. If you want to get out of these situation, you need to change your entire attitude towards money and finances. You need to learn to make sacrifices now to get yourself on the right track for a better future.
Some things that I will tell you may seem harsh. Although it is not my intention to be rude or hurtful, it is meant to open your eyes as to why you are always broke and what you need to do to fix your situation.
So here are the top ten reasons you may be broke and what you need to do to fix it. Take an honest look at which ones you are guilty of and work on doing your best to change it.
Reasons You Are Always Broke
You are drowning in debt
Being in debt is a huge reason you are always broke. It is probably the number one reason most people are always broke. It is very hard to not be broke if you have to shuffle money around every month to get those minimum payments made. Even worse, getting more in debt because you can not make the minimum payments. You then get hit with late payment fees and increased interest rates. It is a vicious cycle and very discouraging to be in this place.
Fix: Do whatever it takes to pay off your debt. Create a debt repayment plan and stick to it. You need to work as hard as possible to make it happen and make paying it off a daily priority until it is gone. You may need to work longer hours and you will have to give up some of the luxuries or wants you allow yourself right now. It won’t be easy, but just think of how much better life will be without that debt. If you think about this and take action everyday until the debt is gone. It will definitely help to keep you motivated to reach this financial goal.
You don’t pay yourself first
Let me just clarify the term “you don’t pay yourself first”. While some people will translate that as “you don’t reward yourself”; others (which have the correct answer) would translate that as “save money now to help you in the near and distant future”. This means saving money for emergencies, short and long term financial goals and retirement.
Fix: Arrange to have a specific amount deposited directly from you paycheck every week into dedicated savings account for emergencies and future financial goals such as buying your first home or whatever it may be. You also need to put money aside for retirement, if your company offers a 401K you need to contribute to it, even more so if they offer a match. If you don’t think that you have enough to spare for saving, then you need to find it. This may come in the form of cutting back on monthly expenses such as downgrading your cable and other services or brown bagging your lunch everyday. I know that if you look hard enough you will be able to pull this off.
You are living in the now with no goals for your future
You are living in the now or living paycheck to paycheck. You are spending your money on instant gratification and things you want now instead of working toward any long term financial goals and the things you want out of life.
Fix: Stop only thinking about what you want today and start thinking about what you want for your future. Think about things you are wasting your money on now, they may make you happy for a while but how long will that last? For example, you may spend a bunch of money on the newest iPhone that just came out even though your current phone is still perfectly fine. You will be happy for a while, but for how long will it be the newest iPhone? Not very long, only until they release the next newest iPhone right?
You are trying to keep up with the Joneses
You care more about what people think of you and the nice things you might have right now. You may have that hot new car or over sized house in a great neighborhood but you cannot afford them. You are struggling to make ends meet just to have those nice things without any regard to your future finances.
Fix: Stop trying to impress other people and trying to keep up with them. Are you really happy with that hot new sports car that you are struggling to make payments on every month? It was nice when you first bought it and maybe your friends envied you for having such nice things. This only last for a little while and is it really worth putting your financial future at risk it in the end?
You are unwilling to sacrifice
You are unwilling to give up some of your wants or luxuries, and you do this even though you know that you can’t afford them and have other financial obligations that you should be making a priority.
Fix: If you want a better financial life you are going to have to sacrifice some things now to get to where you want to be. Don’t you think it would be worth giving up some things that you frivolously spend money on now to have a better life down the road? Before you are about to purchase something that you want but not necessarily need, ask yourself if having this is really worth putting your future at risk. Chances are it is not.
You spend more than you make
You spend more money than you make, you may be halfway through the week and your paycheck is gone and you have no idea where it went. You’re not paying enough attention to your finances and how your money is being spent.
Fix: Don’t use credit if you can not afford to pay your balance if full. It’s simple, if you do not have the money to pay for things now, then you won’t have the money to pay off the credit card bills in full when they are due. This will eventually snowball and before you know it, you are up to your eyeballs in debt. If you want those things that bad, then you need to work for them, make extra money to pay for them without going into debt.
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You don’t have a budget
You don’t have or follow a budget which means you don’t have any plans for your money. Maybe you pay your bills on time every month but it’s without any regard to how much you are paying for these things or with no thought of how you could cut back to save more.
Fix: You need to create a budget NOW. Budgeting and tracking your spending is crucial if you are in financial disarray and is also a must if you ever want to reach any kind of financial goals. It is your roadmap to getting out of debt, having money saved for the important things and must haves, as well as reaching your goals and dreams.
You are not focused on your goals
You are not focused and do not set financial goals for your future. I may not even cross your mind. You are just going with the flow and think that’s all you can do without thinking about where you want to be next year or in ten years.
Fix: Take a long hard look at what you want out of life. Do you dream of just having a financially healthy life? Would you love to someday quit your life draining job and build a business and work for yourself? How about retiring early so you can travel? Just wanting these thing is not enough, you need to set goals and work toward them. I assure you, unless you win the lottery (which is highly unlikely) they won’t just fall in your lap. Set up realistic goals for where you want to be next year, in five years and what you ultimately want in life. Make a plan, what are you going to do today to help reach these goals.
You’re a procrastinator. You keep putting off important financial tasks that need to be dealt with sooner rather than later which ends up costing you more money overtime. It may come in the form of paying bills late which costs you money in late fees and interest. It could also be putting off working on financial goals for your future and what you ultimately want out of life.
Fix: Stop procrastinating!! Take action now and every single day. Guess what, if you keep putting things off until tomorrow or next week or whenever, life will pass you by and you will wake up years down the road and still be in the same situation you are in now. Life is short, stop putting your life on hold and do something about it.
You are not working hard enough
You are not working hard enough on fixing your finances. It may come in the form of paying off debt or saving for emergencies and the future. It could also be in the form of not pursuing your dreams such as starting a business or leaving your current job to pursue a more fulfilling one.
Fix: These are things that you need to be working on for you to live the life you want. You need to do whatever it takes to make it happen. Otherwise you will never be truly happy. Do whatever it takes to make it happen. Take on a part-time job or side hustle to bring in extra money. It won’t be forever, just until you are in a place financially that will allow you to be able to pursue your dreams. It won’t be easy, but it will payoff in time and you will be so happy you did it.
Now that you have taken a hard look at some of the reasons that you are always broke and identified which ones are keeping you from living the life you want, it’s time to roll up your sleeves and get to work. You will be so happy once you do.
What are your financial weaknesses and what is your plan of action to change? Please leave a comment to share with us and get encouragement to keep going and also to encourage others as well.
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