Why Most People Stay Broke

Of course, I must start this off by saying that this is not to be taken as financial advice in any way. I am not a financial advisor or professional in this field. You are responsible for your own choices when it comes to your money, your future and your life.

Money Sneaks Out While Your Head is Turned

Most people think that they stay broke because they simply don’t make enough money to be able to pay bills, live life, and still have some for any “wants” or pleasures that may come up. Not true. Most people stay broke because they choose to pay themselves last, instead of first. What? That’s crazy, right? Did I really just say to pay yourself first?

Yes, I absolutely did! That means even before the bills are paid, you pay yourself first. Even if you are only able to pay yourself $20 to start out of every time you get paid, that money gets paid to yourself before you pay a bill, buy an item, or take another step. Of course, the best and easiest way to do this is to figure out your “pay yourself” number and then set up an automatic draft from every paycheck that goes straight into a high-yield savings account or investment account. I’m talking before you even see the money, it’s gone and sitting in your chosen money-building account. To be clear, no, your checking account is not a money-building account. Your checking account is for paying expenses and living your life day to day.

While most people are focused hard on watching their paycheck and their checking account, their money is sneak out right behind them. Like a little gremlin, it tiptoes behind you and straight out the door, off on its way to someone else’s pockets. Don’t let it sneak away; make sure you are watching the right parts of your finances.

Honest Spending Matters

Okay, time for you to take a hard look at yourself and be completely honest. How often do you spend money that you didn’t need to spend? How often do you buy fast food or meals out, when you could have made a similar meal or even better by staying home and cooking? Yes, groceries are expensive… but they also tend to last more than one meal. You spend $40 on a meal out, when that same money could have probably bought you groceries that would have been two or three meals.

If you are one of those people who often says things like, “I worked hard, I deserve to treat myself and go out to eat” or anything similar, let me change your mindset. Instead, look at it this way – the truth by the way- you worked hard, you deserve to put that money somewhere that it will make more money for you. You worked hard for the money; now let it work hard for you. Don’t be lazy or entitled… cook your own meal and relax at home while you eat it.

How often do you really notice and keep track of subscriptions and autopay expenses that come out of your account once a month? Once a week? Once a year? Sure, everyone talks about the Netflix subscription and the Amazon Prime subscription that you get charged for every month. Those and most subscriptions that come out monthly are easy to spot for most of us. However, what about those that only come out once every 6 months? Have any that come out only once a year? Those are not only easy to not notice for a lot of people, but they are also easy to forget quickly even when you do notice them. You tell yourself that you are going to cancel that annual subscription in a little while, or when you get home, or when you are done watching that show or movie. Then you forget. Next year… same thing happens again.

Pay attention to everything going out, regardless of how often it goes out, and then fix it immediately when you notice it. Not being broke is a choice. Not being broke is something you do, not something you have or get. Growing your finances takes effort, better choices, and paying attention every step of the way. Low income doesn’t equal broke. Low attention and low effort do.

I said what I said.