“Our life is frittered away by detail. Simplify, simplify.”
– Henry David Thoreau
This week, I thought I’d reach for something, put on my “coach” hat, and do what I can to inspire you into greater financial prosperity.
Simple Reasons For Being Broke
As I mentioned, I’m going to risk being a bit blunt here. If you follow my writings, you’ll know that it’s a practice I’ve long-adopted, and (apparently) you like it.
That said, I’ll apologize ahead of time for those of you in truly tragic financial circumstances. I’m referring to events, completely out of control, which wreck your balance sheets. Like a medical emergency, not covered by insurance–and which no reasonable person would have expected.
But for the rest of you, call this your early intervention.
I know life is hard. I know being single is expensive. I know being married is expensive. Having children is expensive. And there’s no doubt that getting divorced can be a drain too. Yes, working two (maybe even three) jobs is exhausting. I haven’t been all of these things. Maybe you have. But on the surface all these reasons for being broke are just the result of a much bigger problem. So if you’re ready to stop complaining about life’s circumstances, then here’s the remedy — the real reason why you’re “broke”.
1. You spend good money on junk.
I’m sure the marketers love you since you’re spending your hard-earned money on modern debris. It’s the stuff that’s cluttering your home and bursting out of your front door. It’s the disposable, upgradeable, and superfluous stuff you buy in a heartbeat because “you’re worth it!” But it costs. It consumes your space, can initially make you feel good but can lead to feelings of guilt, and can make you broke. Please, learn to identify junk and end the spending spree — because yes, you’re worth it. Smile.
2. You don’t have a budget.
Yes, starting a budget can be scary and learning about your true financial situation can be a downer. Get over it. Please. At least get some help with it, find your net worth, add up all your debt, track your spending, and build a budget that reflects your true reality — not the world you prefer to live in. Only when you face the facts–by spending the time to manage your money–will you stop being broke.
3. You don’t earn enough.
This is a toughie. If you’ve cut the junk, you’ve made a budget, and you’re still underwater, you need to fix the income side of the equation. I’ve known people with 3 jobs –THREE JOBS — to make ends meet. They work their tails off to earn enough cash to cover the rent, buy better quality food, and pay off student debt. If need be, they didn’t own a car, didn’t wear fancy clothing, and didn’t wine and dine on the weekends.
The answer here isn’t easy — you’ll have to find a way to make more money. Even in this recession, *if* you can swallow your pride, there’s always a way.
4. You don’t pay off your debt.
If you don’t have a plan to conquer your debt, then you’re going to be broke forever. Once you’re in the know, it’s time to look at ways to increase your minimum payments. Paying just the minimum balance is a sure-fire way to keep the debt around your neck like a noose forever, so dig into that debt by paying it off sooner.
5. You don’t save.
Saving even a smidgen of your salary for a rainy day or in an emergency fund is a wise way to get started. Start a savings plan by taking a good hard look at your spending patterns, your subscriptions and services, and find ways to cut back. For example, downgrading your television package — or canceling it completely — adds up to money that could be put into a high interest savings account. The idea is to be consistent and set up automatic deposits into a specific account set aside for emergencies.
6. You’re paying too much in taxes!
Of course, if you’re a current client of ours, we’re on top of this, on your behalf. But we can only go as far as you let us! So … give us a call: (281) 937-0447. Let’s fix THIS one, and you can start on the rest of the list!
I hope this little dosage of “tough medicine” goes down smooth, and that you’ll forgive me my possible insensitivity. I’m in your corner!