7 Reasons You’re Still Broke…And How To Break That Cycle
It’s often said the rich get richer and the poor get poorer. All around us, there is evidence that seems to support that theory. Did you know that recent statistics show the richest 1% of the population has as much wealth as the rest of the world combined? That’s just depressing. It’s also unfair, warped, and maddening. However, it’s also well-known that reactive people (those that sit around talking about how unfair the world is) are dramatically less successful than their proactive counterparts. So, where does that leave us? Well, for starters, let’s be real. Most of us will probably never reach the top 1 percentile of income earners, but let’s not lie down and take it without fighting! Read on for some sensible tips to maximize your money and turn your financial situation around big time!
7 Ways To Stop Being Broke!
1. Make a Written Budget: Without having a written budget, it’s too easy to wonder three days after you’ve been paid, where all your money has gone. Financial experts say to write a budget, even a basic one, make it reasonable, and then stick to it. Assign every dollar a place. Be sure to allow yourself some flex money for movie rentals, a pizza, or a new pair of jeans. You’ll see that budgets are not that hard to stick to if you make them realistic, and you’ll also see your finances quickly begin to turn around with a budget in place.
2. Get Rid of Subscription Services: We all have Netflix, and many of us have other common apps like Spotify. However, I recently talked to someone who had a subscription service to printer ink! Just because a service exists, doesn’t mean you need to sign up for it. Often, we forget about these services, aren’t using them enough to make it worth it, and the fees are unknowingly getting charged each month to our credit card. Make no mistake, these companies hope for this! It’s how they make their colossal profits. So, make a list of your subscriptions and cancel anything you aren’t using daily, or at least weekly.
3. Start Using Cash: When we pull out a credit or debit card and swipe it, we don’t think much about it. As long as the transaction goes through, we’re good to go! But when you carry cash, it actually hurts to part with it. You see your stack of bills dwindling, and it prompts you to think a little harder (and longer) before you buy something unnecessary. When we use cash (like people did for thousands of years before the Industrial Revolution), we become more mindful of our spending, thus allowing us to be strict with our money and begin to build wealth.
4. Stop Eating Your Profits: I once heard that a couple who owned a cleaning company went in to get their taxes done, and when the accountant looked over their receipts, he told them, “Stop eating your profits!” They were on the road a lot, traveling from one job to another and stopping for fast food lunches and dinners. It made sense to them, but they were shocked by how it all added up over time. Not only is convenience food unhealthy for your weight and heart, but it will also drain your bank faster than you can say, “Can you make that super-sized?”
5. Stop Drinking Your Profits: Do you know that one tall (small) Starbucks a day (and few people actually get the tall) can add up to $1,825 a year? Now imagine if you get a venti each day on your way to work or school? Do the math on that for a real eye-opener! On top of the premium coffee fix so many of us need to get through the day, what about the alcohol we consume at night? Try an experiment: Add up every alcoholic beverage or purchase you make for the next 30 days. You may be surprised at how much of your hard-earned money goes down the drain (literally…sorry) on booze.
6. Begin a Savings Account (Even a tiny one): If you save just a dollar a day under your mattress, in fifty years, you will have $18,250. If you put that into a bank offering a 1% interest rate, you’d have $23,646. But if you’re really smart (and don’t mind a little risk), you will invest your buck a day in the stock market…which, after 50 years, will yield a return of $698,450! There are some variations and some in-betweens (other options than what I have listed), so go check them out and see what’s right for you! Either way, if you say you can’t set aside $1 a day, you’re fooling yourself.
7. Practice the 30-Day Rule: The 30-day rule can be modified, for sure, but it is a great way to monitor your spending and determine wants vs. needs. So you decide you have to have something (a gaming system, a new cell phone, clothes, shoes, anything) and are getting ready to sell a kidney if it comes to that! You really, really want this thing. Mark your calendar for 30 days out (or if you’re too impatient you can make it for 15 days, a week, whatever) and then wait. Yes, wait. Do some research, check around for sales, see if anyone is selling the item used, but in “like-new” condition. Live your life, forget about the item for a while. Then at the end of the waiting period, if you still truly want (and need) the item, go for it! And do so guilt-free! But you might be surprised to find that all of a sudden the urge to have it has dissipated and you’re cool with holding off for now.
So there you go! 7 Ways to stop being so broke! Try them out and let me know your success stories and/or if you have any additional ideas on how to turn your finances around!