It seems like everyone is talking about the state of the economy these days. But what does it actually mean to be broke? Are you broke if you can’t afford that fancy dinner? Or if your car breaks down on a highway in a remote area? People use different definitions for this word and come up with different answers when asked this question.
In this article we’ll discuss what being “broke” means, why most people are still broke despite having jobs, and how to get out of debt once and for all!
1. Wanting to get rich quick
There is a saying that goes, “The poor get poorer, the rich get richer and the middle class stays in the middle.” It is true that most people who make it to financial security do so because they worked hard and smart. They also waited patiently for their investments to pay off. This does not mean you should put all your money in one basket! You need to diversify your portfolio by investing in different assets such as stocks and bonds at different stages of your life (more on this later).
The point here is that getting rich takes time—and patience! If there was an easy way out, everyone would have done it already.
2. Having too many credit cards
As a general rule, credit cards are bad news. They can be dangerous if you don’t use them right. If you have more than one or two credit cards, or even worse, start getting into the habit of using your credit card for everything from groceries to gas to the cable bill (which is really easy), it’s going to take a long time for you to dig yourself out of debt and pay off your balance every month.
I know this sounds obvious but if you’re going to get a credit card at all, only get one—and make sure it’s one with a low spending limit! The best approach is just not having any at all; however if that isn’t an option then go with one of those basic starter cards instead because they come with fewer perks but will also give you less leeway when it comes time paying them off each month—which means less temptation too!
3. Spending more than they earn
If you’re having a hard time keeping up with your bills and other expenses, the problem may not be that you’re not earning enough. The real issue is that you spend more than what you earn.
If this is the case for you, take these steps:
- Spend less than what you earn.
- Save money.
- Don’t spend money on things that don’t add value to your life or help improve it in any way (unless it’s an investment).
- Pay off debt as soon as possible by making extra payments on credit cards or loans.”
4. Inability to prevent impulse purchases
Impulse purchases are a waste of money. You could have bought that item at a later date and saved yourself some cash, or you could have waited until your next paycheck before buying the item.
Impulse buys are something we all do, but they can be avoided by planning ahead. As an example, let’s say you want to buy a new pair of headphones. You see them at the store and think they look cool, so you buy them on impulse without thinking about how much they cost or whether or not they’re worth it to your budget right now.
However, if instead of buying these headphones impulsively in this moment when we feel like getting them immediately (it looks cool!), we wait for our next paycheck and then go back for those same headphones after doing some research online about which ones are best for us based on what kind of music we listen to (Soul Train vs Rock & Roll), then that would make sense because now instead of spending $50 on one pair of cheap-looking headphones with questionable quality when there might be better options out there for half as much money elsewhere…
5. Waiting for the right time to save
You’re probably wondering if it’s too late for you to start saving. The answer is no. It never is.
The more you save, the better your chances of getting rich. The more you save, the less time you need to work at a job and the more options there are for investment opportunities available in your portfolio.
6. People who want to be rich need to know what they are doing.
If you want to be rich, you need to know what you’re doing. The first step is to learn how to manage your money. This means budgeting, saving and investing. You must know about these things before you can claim that you are a financial expert.
If someone tells me that they make $100,000 per year but don’t have any savings or investments, I wouldn’t believe them because this person doesn’t seem like he/she knows much about personal finance at all!
In summary, being broke is not for everyone. If you want to be rich, it requires a lot of patience, dedication and hard work.
It also requires that you know what you’re doing!