What’s keeping you broke?
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I finally figured out the reasons why I was always broke. I also figured out the best way to save money. I’m a firm believer in not just accepting that you never have any money.
I was always broke, and I could never save any money.
Then something changed. I started to look for the reason why I was always broke. Being broke had been such an on going issue in my life, that accepting it didn’t even feel like a failure. It didn’t feel like anything. It was just the way we lived.
You’re broke because you don’t have any spare money, right?
No money = broke. It’s easy. Yep, I believed that was why I was broke for a long time too.
Then something changed. I took a long hard look at the things that I was doing in my life and decided that I no longer wanted to be broke. I believe anyone can do this. Anyone at all, no matter what you’re earning.
If you’ve honestly had enough of being broke, not being able to save money, and always waiting for the next payday to arrive, then this post will help you. You’ve just got to want to change the way you live.
You believe you’ve got loads of time to pay off your debts or save money
No matter if you’ve run up credit card debt, car finance debt or anything else you’ve got hanging around, the longer you leave it, the longer you’re going to be broke.
Yes, you might be able to afford it right now, but it’s a double edged sword. There are 2 reasons why it’s really not okay.
Firstly, your situation might not stay the same until the debts have been paid off. Would you still manage each month without the income you have? Secondly, every extra year you’re making payments to a loan of some sort, you’re not compounding and earning money for yourself.
Every month that you’re paying to someone else, you’re not paying yourself. For a surprisingly easy concept, it took me so long to see this. I just didn’t get the idea that being in debt was so much more than just paying it back.
It was affecting every other area of my financial life and as soon as the penny dropped, my financial life changed.
Look at it this way. Might you regret being in debt? The chances are high…..but you’re really not going to regret living debt free and being able to save money.
You’re not making a monthly budget
If you’re not making a monthly budget, there’s a good chance this is keeping you broke.
Before I budgeted each month, I believed I was in control of my money. I wasn’t!
By having a budget, you allow yourself to live within your means and know where every penny is going. If you want to save money, you can budget what you can afford. If you want to pay your debts, it’s in your budget. Budgets give you control.
I think I was scared to budget to start with. I didn’t know how and so I put it off. The easiest way to start is to just do it, today. Putting it off will not make it better. Take it from me!
As soon as you create a budget, you start to see where your money’s going each month and what you have available to spend on non essentials. If you’re going into the red each month, you need to budget now!
You’re not making goals
Goal setting has been the one thing in my financial life that’s given me the focus I needed to live a debt free life.
I knew I wanted to live this way, someday. And that was the problem I had. When is someday? Someday was never going to come for me unless I had a plan to get there. Having goals lets you zoom in on life and know when you’ll reach where you want to be.
They tell you to speed up when you’re losing motivation or let you relax and know you’re on track.
The statistics on goal setting speak for themselves. People that set goals are NINE TIMES MORE LIKELY to achieve their life’s aims.
If you’re having trouble setting goals or are feeling lost with it all, this books amazing and will set you on a path to being where you want to be.
People tend to think that wild claims about setting goals are a bit over the top, but I know from my own experience that setting a goal is the difference between me achieving something, or not.
My advice would be to start out small. Set a small goal, say to make an extra £20 this week and grow them from there.
Once you see that is IS possible to get things moving, your confidence will grow.
You’re not looking after the pennies
Heard the old saying ‘look after the pennies and the pounds will look after themselves’ ?
If you’ve not made this a phrase you live by, you might well be broke because of it.
Here are some of the things that I used to do without thinking about it too much:
- Buy coffee out all the time – see Thrifty Chaps tips for getting coffee, cheaper, here!
- Lunches out
- Buying brand name ‘everything’
- Buying snacks when we’re out
- Being disorganised
I know that it’s not just me who did these things. Convenience is all around us all the time and it’s super easy to rely on that convenience and make the most of it, especially if you’ve got the little ones in tow.
But it costs you big.
I stopped having coffee every day.
I reduced lunch out with my friends to twice a month, and even then, I got it cheaper! Yes, this seemed unreasonable to me at first. Now, I look back and am embarrassed by how often we used to go out, and once a fortnight is just FINE!
I now take snacks out with me. Not just for the kids, for me too. I make coffee at home and take it on my dog walk instead of stopping by Nero’s or Starbucks on my way. (However, FREE coffee is a different matter!)
I also now REFUSE to buy branded goods of most products. If something is noticeably better then fine, buy it. In my opinion, the vast majority of things are not better, just more familiar to you. If you’re struggling to give up the brands, just check what your priorities really are. Now I look back and think….what was I thinking??
You’re really not earning enough
If your outgoings are higher than your income, with the best will in the world you’re going to be getting into more debt each month.
I’ve been in this position and it’s no joke. But it’s also not going to get any better until you accept the situation and start to build a plan to get out of the trap you’re in. It isn’t easy and it took me a long time to do. Once I started, things got better way faster than I ever thought they would.
There are loads of ways to get extra money coming in. You might be busy already at work or looking after your family, but making the time to change your situation will be something you thank yourself for for the rest of your life.
Here are a few ways you could get started on to bring in some extra cash, that I’ve done and know work!
- Matched betting – the best way to bring in the most amount of money, risk free
- Clickworker – takes a little time to get accepted but has a steady stream of work once you do
- User testing websites – this is quite good fun
Don’t forget to check if you could ask for a raise at work, which would be the best way to earn more for doing absolutely nothing more than you already do.
Getting ‘wants’ and ‘needs’ mixed up!
It’s surprising the stories we tell ourselves to justify spending on things we can’t really afford. I believe it’s likely the number one cause of people having no money each month, or not being able to save money.
Check in with yourself and make sure the things you think you ‘need’ are not really just ‘wants’. No one needs Sky TV. Or a brand new car. It’s not life threatening to buy supermarket own brands or skip dinner out this week.
Once you get your priorities clear and know exactly what you want to do, sorting the wants from the needs becomes easier.
I found that my family didn’t question the changes I made or the way we took a picnic out to the beach rather than went to a restaurant. In fact, they preferred it.
You’re keeping up with the Joneses
This is SUCH a bad money habit and something so many of us are guilty of. I didn’t even realize I was doing it until I started on our debt free living journey.
My own revelation came when we were looking at our car payment. The next obvious question was ‘why do we pay this much for this car?’ and the real honest, horrible answer was that it confirmed to me that we were ok. If we had this car, I thought it told the world that we’d done really well. We’d made it. Of course I didn’t think this consciously. But thats the psychology behind what we know as keeping up with the Joneses.
It didn’t matter that we were in debt, because no one saw that. As long as we made that payment each month, we looked ok. We couldn’t save a penny of course. But the outside world didn’t see that.
It all comes down to ‘keeping up with the pack’. Sort of a left over thing from before when the weakest would get left behind, only nowadays we can ‘pretend’ to be keeping up thanks to credit.
If you’re like I was and have a huge car payment, ask yourself why. Really. If the answers anything like mine was, it might be time to reevaluate. Just saying :)
You’re not checking your utility bills
Utility companies LOVE people who never check price comparison sites to make sure they’re getting the best deal.
It’s so easy to spend a couple of hours and make sure you’re not paying more for anything than you need to be. I have a guide on how to do make sure your bills are the lowest they can be here. It’s a no brainer that so few people do. And who doesn’t want to save money?
Having done this for the first time when we decided to live debt free, I now religiously do this at least every year and certainly every time something comes up for renewal.
Being broke each month might be because you’re paying out way more than you need to be rather than being able to save money. I don’t know about you, but every time our car insurance comes through for renewal, the price goes up. The better deals are always for new customers.
So make yourself someones new customer again by quickly using a comparison site to get a better price. I always check with the current provider to make sure they can’t match the new price, because its quicker and easier than changing. (By easier I mean saving myself the hassle of sending in my no claims…..not hassle at all really!!)
My experience of this is that they don’t match the new price. But I always ask. It’s a bit short sighted of them really but, oh well. Their loss.
You spend before you save
Why oh why, did it take me so long to get my head around this concept.
I spent years, and I mean YEARS, believing that the reason I couldn’t save was because I didn’t have any money available to save. In a way I was right, I wasn’t able to save money. Because I’d spent it all.
I finally got the concept clear in my head, but only after we’d made the decision to live debt free and I was forced to look really closely at my spending habits and sort out what was really going on.
You need to pay yourself first.
If you feel that this sounds a little cheesy, then yes, I agree with you, it does. But it’s also true. There is no way you’ll be able to save money if you wait until you’ve bought everything you fancy first. So heres the rule.
Save first, spend second.
It’s a great rule. Put away the amount you’ve decided you want to save and then budget with the rest. If you need to add more money to your budget, find ways to make some. These ideas here are just a few of the ways that people, including me, are adding £’s each month to their budgets. It doesn’t have to end with your day jobs pay.
You tell yourself ‘you only live once!’ as an excuse to spend
I used to fall into this camp and regularly used this excuse to allow myself to spend money when I knew we couldn’t afford to. Then I opened my eyes.
You DO only live once, yes. So please, don’t spend so irresponsibly now that it affects what should be worry free years later. Learning to save money doesn’t have to be boring. I’ve got some posts here about FREE things you can do and swops you can make so you’ll not even notice you’re actually saving money.
There are various other excuses people use to not save money. Ever told yourself any of these?
- I’ve worked hard, I deserve it
- I might not be around tomorrow
- The price is so good, I’d be an idiot to not buy it
- So and so loves it, she’ll be so happy
Here’s that list again. Print this one off and keep it in your bag.
- I’ve worked hard, I deserve it – Don’t you also deserve to give yourself some security? Isn’t that worth more than new jeans?
- I might not be around tomorrow – Or you might. What happens then?
- The price is so good, I’d be an idiot to not buy it – You’d be an idiot TO buy it unless you can hand on heart say you NEED it.
- So and so loves it, she’ll be so happy – Would she be as happy to know that you couldn’t save each month because you keep overspending?
I think you get the idea. There are very few of us that are lucky enough to be able to not have to ‘learn’ how to save. I certainly wasn’t, and although it took a long time, I did get there.
Thoughts appriciated as always!