There can be a LOT of reasons that you are broke. But not all of them pertain to all people.
Personal choices can make or break a person. In life there are things that can help propel you toward your goals and things that can set you back from them. Do you want to lose weight and have abs? If you eat ice cream every day, you will be further away from that goal. Want to raise your kids to be good adults? If you are a Karen every time you go into public, that probably won’t work out for your kids as well. Want to have no money stress? Then you should probably start paying your credit cards off every month, saving consistently, and living below your means.
Let me show you 6 things that keep you broke.
(1) Not Budgeting
This is the base of the reasons you are broke.
Do you know of any successful companies that don’t budget? Think that Amazon, Microsoft, Tesla, put together budgets? Of course! That is part of the reason they are successful. The same is true for ordinary people.
Simply making a budget won’t make you wealthy. But if you don’t budget for long enough you are almost guaranteed to be broke.
Currently, about 20% of people do not put together a regular budget.
It’s going to be really hard for those people to get ahead financially in the long term.
If you don’t have a plan for your money, companies will make the plan for you. You will spend in amounts and places that you didn’t even think of. Think your grocery bill was $300 last month? If you don’t budget, then I could almost guarantee that it was a lot more.
A budget doesn’t have to be restrictive or painful.
It is simply a plan on where to spend your money. If you don’t have a plan then you will get nowhere.
(2) Eating Out too Much
The next of the reasons that you are broke is a reason that gets a LOT of people. Don’t be upset if it gets you also. Just do a budget and plan on how much you are going to eat out.
The average person eats out nearly 6 times per week!
Yikes, that is a lot.
It may not be the times that you go and sit down at a restaurant that can really set you back. It’s the coffee in the afternoon, the hamburger on the way home, or the drinks on Friday night.
You don’t have to stop eating out either. Just plan for once or twice a week and budget for it.
You should do the things that you enjoy. And if you enjoy eating out then do it! Just plan for it and keep it to a reasonable expense.
(3) Driving a Car that is too Expensive
This one can be difficult for a lot of people. Especially because as I write this article, car prices are at all time highs.
The next of the reasons that you are broke is that you are driving a car that is too expensive.
But you don’t have to drive a really expensive car either.
In my time financial coaching, I have seen it SOOOO many times. Someone has a kid and wants to upgrade their $20,000 sedan for a $40,000 minivan because the minivan is “safer”.
Someone gets into a car accident and gets a check for their totaled car from the insurance company for $15,000. So what do they do with it? They buy a $30,000 car to replace their $15,000 car.
One of the biggest things that will keep you broke is the car that you drive.
Make sure that if you have a car payment, it is reasonable and you pay it off as fast as possible.
(4) Amazon Impulse Shopping
This one gets me in the winter. When it’s too cold to be outside, I tend to surf Amazon and buy stuff that I really don’t need. We’re all guilty of it.
This is how I do my online shopping now.
I have a running list of things that I would like to buy (but I don’t necessarily need). Once that item has been on the list for a month or so and I still want it, I buy it. So long as it fits into my budget of course.
We have all overspent online and had the Amazon deliver person come to the house WAY too often with packages that we really don’t need.
Make sure to be more disciplined with your online shopping habits. 🙂
(5) Carrying a Credit Card Balance
This is a BIG reason why you are broke.
Currently, more than half of people carry a credit card balance EACH MONTH!
Sure, some of those people are paying 0% APR. But most are not!
It is going to be impossible for you to get ahead financially while paying 20+% in interest on your credit cards.
If you use credit cards for your living expenses for the points, miles, perks, etc. that is completely fine! Just make sure that you are paying off the card each month.
And, I’ve said it before and I’ll say it again. If you are consistently carrying a credit card balance, you need to get rid of the card because you are not financially responsible enough to have it.
(6) Lifestyle Creep
This is the final of the reasons why you are broke is one that I am fighting right now.
Over the past couple of years, my wife’s income as well as my own have increased a lot. But we have also had our expenses increase.
Some of increase is good. For example, we moved out of our small apartment and purchased a house (with a very conservative payment for our income). But we have also eaten out much more than we should have, we have upgraded memberships unnecessarily, and we have taken trips and not budgeted for them appropriately.
It happens.
Just do your best to not let your expenses outpace your income as your income goes up. Especially if you are trying to pay off debt or save for something big in the future.
Final Thoughts
This article is not meant to make you feel bad or feel guilty. I have been (or are currently) guilty of each of these items myself.
It’s okay!
It’s not about where you are now. It’s about where you are going. 🙂
And I will help you to get there. I will help any way that I can!
You can do this!
Until next time!
0 Comments