If you always have more month than cash and never seem to get ahead or even to even, it’s time to look at some reasons you may be broke.
- You spend your money on the wrong stuff. Instead of investing your money in education or your 401K, your money goes to clothes, gadgets, big screen TV’s or alcohol. If you don’t have enough money, it’s time to quit spending on stuff that doesn’t last.
- You don’t keep track of your money flow. You don’t know what you have coming in or out. You haven’t balanced the checkbook in years. All you know is at the end of the month there is never enough money. Keep track this month of everything you spend. Then at the end of the month evaluate to see if you are spending money how you want to be spending it.
- You are spending more cash than you are bringing in. If you make $50,000 a year after taxes and spend $60,000 a year, your finances are going backward. Look at how much you spend each month. Now see how much money you are bringing in. If you are bringing in less than you spend, you need to fix that fast.
- You aren’t taking responsibility. You know you need to start paying attention to your money. You know you shouldn’t be using credit cards all the time nor should you be making balance transfers and not paying them off. You know getting a second mortgage is a bad idea. Now is the time to take responsibility for past mistakes. Don’t blame your spouse, the economy, your parents or your job. Look at your part of the situation and move forward.
- You won’t make any sacrifices. Sure you know you are in debt over your head. But there is no way you are going to give up cable, the cell phone, eating out or your gym membership. So you continue to get further in debt as you continue to spend. What is the one thing you are refusing to give up that would help you pay off your debt?
- You shop to feel better. You shop to release stress, to be someone else, to escape. But, you can’t escape your life and the bills will follow you. Stay away from the stores unless you need something. Send your spouse to do the grocery shopping. When you do need something, shop with a friend that won’t let you go overboard. If you think you need it, attend shopoholics anonymous.
- You have bad money habits. You have pizza every Friday night. You have a latte on the way to work every day. You go weekend e-baying, garage-saling or to the flea markets. What are some good habits you can do? Perhaps a walk with a friend instead of lunch. Or making your own coffee. How about a trip to the park instead of weekend shopping?
- You have no budget. You spend until the money runs out and then you put your purchases on your credit card. Try a simple budget. Write out what you have to spend on your home, utilities and other necessary items. What you have leftover is how much you can spend. Put some money aside for savings and food. How do you want to distribute the rest so you are spending money how you want to?
- You got divorced, had medical bills, or were unemployed. Life stinks sometimes. In one month every single appliance in our house broke from the stove to the washer to the toaster. So even though things happen, now we need to clean up the mess. Not pretend our finances are fine. Look at your financial picture and see what you need to do next.
- You are competitive. You don’t want to keep up with the Joneses, you want to leave them in your dust. Be very clear of your motives before buying something.
As you can see there are many reasons why we may not have the money we need. The key is to rectify these issues and manage our finances in a way that gives us what we need with what we have.
So, have you been broke in the past? If so, why? And, how did you get out of it?
Guest Post Author Bio: This is a guest post from Andrew Wang, who blogs about how to make money.