If you are broke and can’t figure put why it is probably because you have not faced the truth. The truth is, if you are earning a steady income but still find yourself with empty pockets at the end of every month, you are doing something wrong. It is time to look in the mirror and tell yourself the truth about why you are broke. Here are 10 truths you must face about why you are broke.
#1. You are LAZY
Yup I said it. Most of you reading this are probably pretty freaking lazy. Either you don’t realize it or you refuse to admit it. It’s human nature. It is the reason we have the instinct to problem solve. Why work harder when you can come up with a way to do it faster and easier (preferably without ever leaving the couch).
We are a lazy ass society. Think of how much you can get done without ever leaving the house. Need to do grocery shopping? How online, place your order and someone will deliver milk and eggs to your house. Need to pay bills? Online. Send mail, yup, stay in bed because you don’t need to leave the house for that either.
It is becoming increasingly easy to get things done without ever putting forth much effort which is also making us spoiled….
#2. You are SPOILED
You have had it easy and been pampered your whole life. Now that it is time to go out and earn it through hard work, you don’t want to. Boo hoo poor you you gotta get out of bed and go to work to earn money.
I have news for you; Life is hard and nobody cares about you. If you want something, you are going to have to go out and get it. Weather you are 18 years old and just starting or 45 and never learned how to handle all that life will throw at you. The truth is, the only person invested in your success is you and if you continue to expect things to just happen for you, you are going to be very very disappointing. So go out there and earn it you lazy ass spoiled brat.
#3. You are wasteful
- How much food do you throw away in a week?
- Is your fridge and closets full of food you will never eat.
- Do you actually wear all of the clothes in your wardrobe or have you bought a bunch of stuff you will never wear?
- Do you own a closet or basement or garage or cabinet full of stuff you never use?
- How many paper towels do you go through in a week?
- Bottled water when the sink will do just fine?
- Do you own a gym membership but don’t go to the gym?
- You probably needed new gym shorts, an IPOD, headphones, and a stainless steel water bottle for your workouts that never went past the first few days.
- Be honest, you own a juicer or blender you haven’t used in years if ever.
You can’t fool me. I own a waffle maker, a cotton candy maker, and a popcorn machine still in the box. I have also made the mistake of spending money on crap I don’t need and will probably never use.
Wasteful spending is money not saved. Money not saved is interest not earned. Interest not earned is interest never compounded. And before you know it 40 years has gone by and you are looking back calculating all the money you wasted that could have been part of your retirement fund.
I am 45 years old right now and should probably have been retired 5-7 years ago conservatively if I didn’t engage in wasteful spending. If you want some examples of areas you are probably spending money wastefully that is costing you millions in the long run, check out this article. 10 insanely easy ways to cut spending and become a millionaire by 45
#4. You are an addict
Shopping? Food? Smoking? Drinking? Are you addicted to something that is costing you your financial future? It could be something as simple as collecting autographed football helmets or as harmless as needing to own every superman comic ever printed. If you have an addiction to something that costs you money, it might be having a negative impact on your finances and it might be time to re-evaluate.
#5. You just suck with money
Look, some people are just no good with money. If you just can’t seem to budget or balance the check book, this might be you. If you always seem to be paying bills late even though the money is available, you might just suck with money.
This was me. I can’t tell you how many late fees I paid just because I couldn’t get the check in the mail on time. The 1st of the month just seemed to creep up on me every month and before you know it I was sending in checks late even though the money was in my account all along.
If this is you and it is costing you money, you either need to figure out how to get good at this stuff or hire someone to do it for you. I wrote an article called Do I need a Financial Advisor? A helpful guide to wealth management that you might find useful.
#6. You have no self control
If you are in credit card debt, chances are you have no self control. Credit card debt is for suckers. You are wasting money on high interest rates and fees. I say if you can’t afford to pay cash, you can’t afford it at all.
Try this. The next time you see something you want to buy, wait three days and then ask yourself if you still want it. Chances are you will realize that you don’t NEED it and you probably didn’t even want it all that much. Money Saved!
#7. You are driving a million dollar car
Ask yourself 2 questions.
- Are you making car payments?
- Are you driving a million dollar car?
I have news for you, if you are making car payments, you ARE driving a million dollar car.
The average car payment is about $500 per month. $523 to be exact according to Experian. $500 deposited monthly into an account earning 7% interest over 40 years comes to over $1.2 million. Imagine, at age 20 you have a choice. Drive a brand new Ford F150 for the next 40 years and have an empty bank account or drive an economy used car and have $1.2 million at the end of 40 years. If you chose the car then you are probably suffering from #8 on our list.
#8. You have a low self image
If you are driving a new car, feel the need to take at a loan to upgrade your counters and cabinets, and upgrade your phone every time the newest model comes out, then you probably have a low self image.
This is called keeping up with the Joneses and only suckers do it. The self made millionaire does not. They know that the Joneses don’t matter. The millionaire knows that the Joneses are in for a long life of working to pay for keeping up the appearance of being wealthy. What it boils down to is the question, do you want to be wealthy or do you want to appear to be wealthy. Only you have the answer.
#9. You up-size every time you get a raise
If you are making more today then you did last year and the year before that, and so on, you are probably a victim of lifestyle creep. Lifestyle creep is what happens when you allow your spending to increase along with your income. So as you get raises in pay, you increase your spending.
If you are over the age of 25 you are probably in a much nicer car then when you were 18 and earning minimum wage. Your home is probably bigger and filled with more stuff. You go out with friends more and probably even offer to treat more often.
This is a recipe for disaster if you are trying to set yourself free financially. Lucky for you, I wrote an article dealing with all the ways to avoid lifestyle creep. Check it out here
#10. You truly don’t make enough money
If you are working 2 jobs and burning the midnight oil every day just to make ends meet, you might need to consider the possibility that you are not broke at all but poor. There is a difference between not having enough money at the end of the month to go out for drinks with the boys and not having enough money to pay the electric bill so the kids have light to do their homework.
If this is you, then you need to figure out how to make more money. If you truly have cut back all stupid spending and can honestly say you are working hard to earn as much money as possible, but you still can’t afford the essentials, maybe you just don’t make enough money.
It is also possible you just love in the wrong area. A waitress living in New York city will obviously find it harder to pay the rent than one living in Boise Idaho.
Before throwing in the towel, take an introspective look at yourself. There are people far worse off then you. If you are whining about not having money for the new IPhone, get over it. There are people out there who can’t afford to eat. Take comfort in knowing you are fortunate to not be them, pull yourself up by the bootstraps and get to work.
I hope are not actually poor OR broke, but if you are struggling for a way to improve your financial future, I hope this was helpful. Thanks for reading and don’t forget to hit the resources page to see my recommendations.
Earl