10 Reasons Why You’re Still Broke

10 Reasons Why You're Still Broke

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Does it always seem that there’s more month left than there is paycheck?

When you look around, though, everyone else seems to be making ends meet just fine.

Is it something you’re doing wrong, or is everyone else just putting on a front?

The problem really boils down to one thing: People are stupid with their money.

Each day, we waste money (myself included) on things that don’t matter or better our situation. If we don’t make changes here and now, we’re going to be left with nothing to show for the years that we slaved away at our jobs.

Here are 10+ possible reasons why you’re broke, along with the ways you can go about fixing them.

1. Your Socializing is Too Expensive

Alcohol is expensive.

I remember one night that I came home from the bar $125 lighter. While I’ll admit that I had a pretty great time, I could have spent significantly less by having an equally good time at home instead.

With 5-6 drinks, some food, a tip, and an Uber ride home, I couldn’t believe how quickly that money left my wallet.

The biggest problem was it wasn’t limited to just that weekend. My entire social circle revolved around going out for drinks. It was once during the week, and then again on the weekend, and then someone else inevitably wanting to hit up Happy Hour three days later. $50 here, and $35 there soon added up to a couple hundred a month.

How to fix it: Try cutting back just a little bit. Go out every other weekend, instead of every weekend. It’s okay to turn down an invite every now and then, and no, your social circle won’t shun you for the rest of forever.

Alternatively, offer to host a get-together at your place. Have people pitch in and bring something. Or order pizza. Neither of these options is free, but it’ll be significantly cheaper with everyone else splitting the cost.

Entertainment also doesn’t necessarily need to revolve around food and drinks. It seems that meeting up for dinner is the go-to option, but there’s nothing wrong with hanging out at the park, visiting a local museum, or checking out a free music event downtown.

If you absolutely must go out for drinks, try pre-gaming at home first. You can get alcohol for 1/10th the cost of what the bar charges. Then, at the bar, you can drink water instead so you don’t feel excluded.

2. You’re too cheap

Often times, buying the least expensive option doesn’t save you any money. If whatever you’re buying breaks within a few days or weeks, and it forces you to buy it again, that’s not saving you any money whatsoever.

How to fix it: I have a phrase that I use often. “Buy it right, buy it once.” I think this mantra often applies to tools I purchase.

Say I’m buying an electric drill or a skill saw. I look around at all the significantly cheaper options on the shelves around me, but ultimately I think to myself, “I want to buy this once, and then never again.”

So while my drill may have cost $95 more than the next closest option, I have confidence that I won’t have to replace that tool for the next 20 years (or possibly even ever). It saves much more money in the long run.

This doesn’t apply just to tools. It applies to anything. And of course, within reason. Be smart about it. I don’t advocate going out and buying a brand new car because it’s “more reliable”. No, come on. Don’t be stupid.

3. You must have name brand

Too often, we’ve been pre-programmed to purchase a specific brand. It could be because that’s what your Mom bought growing up, or you’ve just never known anything different.

If there’s a defined reason as to why you purchase a certain brand, that’s perfectly fine, but the thought here is not to make mindless purchases.

How to fix it: Only buy from a brand if it brings a noticeable difference of joy into your life.

For example, over-the-counter drugs are often times chemically identical to their name-brand counterparts. The reason they’re more expensive, is because of the marketing to make their branding more flashy.

For the most part, my wife and I buy the “Great Value” brand whenever we purchase anything from Walmart, and we’ve found very little difference. The other day we purchased some frozen chicken wings. We bought both “Tyson” and “Great Value” brand just to compare. We greatly preferred the Great Value brand more.

Another thing we’ve used to save money on ANY brand, is to use the Ibotta app. We’ve saved hundreds of dollars on groceries, just by buying things we were already purchasing anyway.

4. You’re lazy

I’m guilty of this myself.

How often do we pay the $3.50 ATM fees, simply because our bank is “all the way across town”. And by “across town” I mean “three blocks away.”

What about when you’ve had a “long day at work” and you “don’t want to cook”, and so you tell your wife that you’ll just “pick something up along the way”.

Being lazy seems momentarily small, but over time, these little expenses add up significantly.

How to fix it: Unfortunately, there’s really not a good way to fix it, besides just doing it and quit being lazy. It takes a concerted, conscious effort to remind ourselves to push past what’s easy in life, and to reach for something that requires a little more work.

But nothing worth having is easy, right?

One thing that’s made my life significantly easier is purchasing an InstaPot. I absolutely HATE cooking, but this has been a life saver. Rather than grabbing some fast food, it’s taken the headache out of making dinner by knowing that I can have chicken and rice ready to go in 10 minutes or less.

5. You’re disorganized

It’s starting to get cold outside.

You wake up to go to work one morning, and you can’t back out of the driveway, because snow is blocking you in. You know you have a shovel in the garage somewhere, but it’s buried underneath the mountain of boxes and half-finished supplies for that blanket ladder your wife wants you to build her.

“Ugh. Forget it. I’ll just grab another one on the way home.” So you stop at the store, buy a snow shovel. Now you own TWO shovels that you can’t find.

Later that evening, you get an email from your bank, notifying you that you have an overdraft charge on your checking account. “Gah! I forgot to move money over!”

How to fix it: Being disorganized has consequences. Often times, it makes things more expensive.

Rather than shelling out additional money for that shovel, that you finally found when you’re doing your spring cleaning, you could’ve had a go-to place to grab it from right away.

Or instead of having a pile of mail and bills on the counter that you’ll “get to” eventually, set everything up on autopay so you’re not hit with extra late fees. Automate your life as much as possible so you can set it and forget it.

6. You ignore the big picture

Are you the type of person that would rather check your Facebook than face your checkbook (see what I did there)?

I get it. Taking a look at your finances can be a little scary.

You’re not completely aloof, though. You know what your minimum payments are, and you make all your credit card and student loan payments on time. But you’re terrified to find out what the total balances are, and you think that if you ignore them, they might just magically disappear.

Rather than making any sort of debt towards your financial freedom, you just pay the minimums, forking over hundreds in interest.

How to fix it: At some point, you’ll have to face your fears. Just because you think it’s not there doesn’t mean it’s going to hide from you. The debt always comes due.

By opening every bill, and paying more than the minimum, you’ll slowly begin to chisel away at that mountain.

Remember, the journey of 1000 miles begins with a step.

7. You purchase more house than you need

I understand the appeal on this one. I truly do. Having a nice, big house is the American symbol that you’ve “made it”.

It’s fun to show off to your friends, have a place you can entertain, and have a yard or a shop that you can invest time into and be proud of. The problem here, however, is that almost anyone can qualify for a home. Since the crash of 2008, the Federal Government has put policies in place to limit who can qualify, but we’re almost back to pre-recession days. Those with low or no incomes are still buying houses much larger than they can afford.

How to fix it: The general rule of thumb is to spend no more than 25% of your gross (before taxes) monthly take-home pay on your monthly mortgage payment.

Let’s run some numbers here, shall we? Let’s suppose you make $100,000/yr. Dividing that by 12 months, we come out to $8,333 before taxes each month. 25% of that $8,333 comes out to $2,083. Your mortgage payment should not exceed this. Be sure to incorporate taxes, private mortgage insurance, and homeowners insurance in these costs as well. (Are you considering buying a house? Check out our Mortgage Calculator.)

All-too-often, I see first-time homebuyers purchasing more house than they can afford. They’re elated by the prospect of “owning” their own home and they get in way over their heads. By sticking to this 25% rule, not only will you have enough wiggle room in your budget for utilities, repairs, and a rainy day, but you’ll also be able to sleep at night, knowing that you can easily afford your payment.

Peace of mind, for me, comes by knowing that if I were to lose my job tomorrow, I could go down to the local McDonald’s looking for a minimum-wage job, and still make my mortgage each month.

8. You don’t make enough money

This one seems obvious, doesn’t it?

But here’s the thing — if you’ve already cut down on all excess spending, you’ve minimized your bills and obligations as much as you can, you’re sticking to a budget, yet you still can’t seem to make ends meet then you need to make more money.

Easier said than done though, right? I mean, if you could be making more money, you would’ve already done that.

How to fix it: Working your ass off and showing your boss that you’re worth a raise is the easiest way to make more money. If you’re really stepping up, you should be rewarded accordingly.

If they refuse to give you a raise, the next best way to jump up in income is by going somewhere else. In the last three years, I’ve 2x my income, simply by moving to different jobs. Employers are happy to keep you where you’re at, because they’re already paying you a fixed wage, so they know that you’ll continue to do so. Or at least until you get fed up.

It’s time to hustle and work hard. There’s really no other way around it. If you

9. You don’t cook at home

I’m guilty of eating out too frequently. I’m consistently working on cooking more meals at home.

After a long work day, it’s easy to tell yourself, “I don’t want to cook. Let’s go grab something.” Those with kids, I’m sure, have this appeal to them even more.

How to fix it: An average family of four can cook at home, an entire meal, for around $10. Often times, that meal will make more food than your family can eat, creating leftovers for lunch the next day. That works out to $2.5/per person. Start eating out, and that meal will jump up significantly to $40, or $10/person.

Recommended: 12 Ways to Save Money on Groceries

I work with a guy who has six kids. He says each day, his family goes through a loaf of bread. “If I paid for my kids to eat school lunch, I’d be living on the streets.”

10. Saving isn’t a priority

I get it. The thought of saving money, when you’re barely making ends meet, is a daunting task.

The other day, I overheard a guy telling another co-worker than his “monthly car payment was more than his entire savings account.”

Hold up. What?

How to fix it: In my own life, I’ve seen my own financial stagnation start creeping up when I wasn’t paying myself first, even though I had a good-paying job.

When you get paid, be sure to set money aside first for your financial future. Not only does this help for a rainy day that will surely come, it helps set a precedence for the rest of your life.

Doing this automatically each pay-period helps improve the chances of this becoming a habit, and the more likely it will stick. You get ahead financially by making saving a priority.

I think the biggest part about saving is making sure that it’s automated. One thing that’s really helped me to save hundreds, without even thinking about it, is using the Acorns app. Say you purchase something at the grocery store, and the total comes to $5.20. Acorns rounds that amount up to a dollar for you, and invests the other $0.80 — automatically, without you having to do anything. I’m surprised every time I open up my app and find how much money I have just sitting in there, growing automatically for me.

Conclusion

This isn’t an exhaustive list, and all of the things I’ve listed, in moderation, are acceptable. It’s when we lose sight of our goals and spending habits that we get into trouble. By curbing our destructive spending, you’ll set yourself up for a better financial future.

1 comment

  1. sanecents

    Sorry you feel that way, N.D. But I still feel the same, and stand by my opinion. I’m not saying I’ve never seen a cool-looking tattoo, because I absolutely have. But as I mention, very often, as I speak with people, they end up regretting their tattoo years down the road. Styles and opinions change. But I personally believe it’s a better use of money to invest in a dividend paying asset instead.

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