Are you wondering why there is never enough money in your account at the end of the month?
You work your ass off at your full-time job, but no money is left to save.
Everyone around you is buying a house or car or travelling the world, and you are financially stuck at the same point and cannot move forward.
You’re not the only one…
At the start of 2022, 64% of the U.S. population lived paycheck to paycheck. 54% of people couldn’t afford to cover just $1000 in emergency expenses.
In the UK, 41% of Brits don’t have enough savings to live for a month without income.
Interestingly, low income is not the case of the issue; even among those earning six figures, 48% said they now live paycheck to paycheck.
If you want to improve your financial situation, you must first understand the core of the problem.
So, let’s dive in and find out the 10 Reasons why You’re still Broke:
1. You have a Student Debt
When you were young, you probably heard that getting a college degree is the only way to be successful and wealthy. This piece of paper supposedly assures you of a well-paid and secure job.
Unfortunately, many graduates still struggle to find employment despite their expensive diplomas. Experience and skillset are much more valuable than a paper.
The biggest problem with studying at the university is the high tuition costs that most students can’t cover from their pockets; hence they have to take a loan. The average student loan debt is $37 584 per student in the USA and £35,000 in the UK. For more prestigious universities and study subjects such as Law or Medicine, these costs can even exceed $150,000!!
In addition, studying requires committing a minimum of 3 years of time and effort. This could have been invested in getting work experience or learning particular skills with a cheaper alternative, such as online courses, internships, etc.
It’s great that young want to be educated, but it is not great to be ripped off by Universities!
Before you follow the system and go to college, check alternative learning options. Maybe your dream career path doesn’t require an expensive college degree.
2. No financial education
The education system at school doesn’t teach students any basic knowledge of finance.
Lessons on building a credit score, paying taxes, getting a mortgage, budgeting, or investing money don’t exist in the school system. Nothing weird that you don’t know how to manage your money correctly. You cannot build wealth because you have never been taught about personal finances.
You will stay broke if you don’t learn how to manage your money correctly. Luckily financial education is very accessible. You can find all the information on the internet for free.
3. You are not tracking your expenses
You don’t have control over your spending. Money comes in and out, and you have no idea where it goes. You don’t follow any budgeting system on how much money can be spent for your needs, fun, savings, and investments.
In America, 70% of millennials have no emergency funds saved. You may complain that you cannot save even 10% of your income. However, I bet you will find something you waste money on once you track all your expenses. It might be an unused subscription or too often eating out.
Tracking all your money will allow you to notice your toxic expenses and eliminate them.
A budgeting plan is a great way to stop overspending and start putting money on the side. Without a budgeting system, don’t be surprised all your money keeps disappearing every month.
4. You focus too much on others
“People spend too much money they don’t have, on stuff they don’t need, to impress people they don’t like”
You let social media and your work environment influence you too much.
A person with a luxurious lifestyle is seen as someone who achieves success. You don’t want to look like a failure!! So, you spend all your money to look rich instead of being rich.
Spending money to “show off” is a common and toxic habit. Real success is never measured by appearance. Once you stop focusing on others and start focusing on yourself, you become a much happier and more prosperous person.
5. You are buying too many bullshits
Bullshits are meaningless items you don’t need and don’t bring any value or long-term happiness to your life. For example, you don’t need Dior lipsticks in all shades, another pair of heels, or five different phone cases.
The evolution of smartphones and online shopping made spending money on bullshits much easier. Your impulsive purchase might seem innocent, as the things you buy are cheap. However, if you put them together, you will be surprised at the money you have wasted.
Look around your flat and notice how many things you have that weren’t used more than once.
The less money you spend on bullshit, the more money stays for something valuable.
6. You are not investing
You are not investing your money because you don’t have enough savings yet, you don’t understand investing, you believe that investing is only for wealthy people, or you think that it is a sort of gambling, and you fear losing your money.
However, none of the above should hold you from investing. You are saving money not to keep it in the savings account but to invest and compound its value. This is the way to build wealth.
Investing is not only buying an expensive stock or bitcoin. You also don’t need to be rich to start. For instance, you can invest in expanding your skills, hence your value as an employee on the market, by enrolling on an inexpensive course. You could invest in your side hustle or business.
A wise investment plan can sort out all your financial problems. However, ensure you fully understand what you are investing your money in. Al does your research.
7. You don’t make enough income
Cutting expenses will not help much if your income only covers your basic needs. You need to find a way to earn more money.
Luckily there are many possibilities to increase your monthly income.
You can start a side hustle in your free time off work. Freelancing or a small online business is a great way to make extra cash. If you struggle financially, consider taking a second job till you improve your situation.
However, if you don’t want to hustle, you might ask your boss for a pay rise. If that’s not an option, learn new skills to improve your value and find a better-paid job.
Your income is supposed to reflect the work value you put into the company. To increase your salary, you must first increase your value in the job market. If you stop expanding your value and skills, you will stay broke.
8. You don’t have a financial goal
You don’t save, invest or budget your money because you don’t see any reason to do so.
Living in the moment and enjoying money now seems more attractive than thinking about the future. Lack of financial goals and action plans keeps you broke. You procrastinate the steps that need to be taken to build your wealth.
Thinking that “one day” you will buy a house, or make more money, will not get you anywhere without a plan and action. You are missing a specific financial goal. For instance, an excellent financial goal is:
“I want to buy a house within five years. I will need to have an X amount for the down payment, which means every month I need to save X part of my income”.
A Specific goal that will help you to stay motivated and keep away from unnecessary toxic spending.
9. You have a “poor” mindset
People with a poor mindset think that money is evil and all millionaires are thieves. You believe that you’re not rich because you’re too honest and not lucky enough in life. Poor blame everybody else for their failure, while people with rich mindsets are aware that they are responsible for their destiny and life.
Poor mindset doesn’t like to leave outside the comfort zone. They are afraid to take any risk and move forward with their life. A rich mindset is taking a risk, thinking out of the box, and understanding that changes are necessary to grow in life.
A poor mindset thinks that education is finished once they graduate. A rich mindset believes that people learn their whole life.
Poor mindset spending free time watching Netflix or partying. A rich mindset reads books, learns new things, and grows as a person.
People with rich mindsets never dress to impress. They don’t need to prove anything to anyone. Poor spend all their money on designer clothes to feel better about themselves and pretend they are successful. When in reality, they’re just getting more broke.
With a poor mindset, you will stay broke. Decide on which side you want to be on.
10. You don’t know how to say “no.”
You have difficulty saying “no” to your friends, as well as to yourself.
Your FOMO (fear of missing out) is stronger than your commitment to stick to your financial goals.
You don’t like to be the one who rejects an invitation to go out, even tho you know you cannot afford it. You don’t want to disappoint your friends, so you say “yes” to whatever idea they have, regardless of your budget.
Saying no to those beautiful shoes on sale is also a struggle.
You need to learn self-discipline and how to say “no”. There is nothing wrong with rejecting your friend’s invitation to another party. Real friends will understand that you have a financial goal to hit. If they want to see you, they will be fine with chilling together at home, and if not, you don’t need fake friends in your life.
Start saying “no” to impulsive purchases and frequent going out.
