Our society has taught us how to be greedy, needy, over spenders. In fact, it’s empowered us to be downright irresponsible. We want what we want and then we go buy it! If we don’t have the money, we buy it anyway. With this in mind, here are the top 10 reasons that you will always be broke:
1. You Don’t Separate Wants From Needs
“People, generally speaking, have a hard time differentiating wants and needs,” said Grayson Bell, personal finance blogger at Debt Roundup. “They use the word ‘need’ for almost everything they purchase, causing them to actually believe they ‘have’ to spend the money.”
2. You’re Trying to Have It All
Instead of trying to have it all, Paquin advised picking one big “want” to budget for and leave the rest for the future when you’ve had a chance to build up some savings and earn a pay raise. “Living one more year like a student while saving your first paychecks can help tremendously.”
3. You Spend More Money Than You Make
Nick Loper, founder of Side Hustle Nation, said the root cause of being broke is nearly always the same: People “spend more than they make.” “As far as I know, that’s the only cause of bankruptcy,” Loper said.
4. You’re Stuck in a Debt Trap
“When you’re poor, it’s easy to get stuck in a debt trap because you’re desperate,” said Kristin Wong of Brokepedia. “Whether it’s a payday loan, debt settlement scam, or even just using a credit card for an emergency, it’s easy to make rash decisions when you’re stressed, and these decisions usually keep people broke.”
5. You’re Ignoring Big Debts
When you’re broke, stacks of bills and overdue notices are a huge source of anxiety and dread. But avoiding those problems and failing to manage your debts only makes them worse, according to Robert Farrington, founder of The College Investor.
6. You Don’t Stick to a Budget
Having a budget is personal finance 101, yet many people still don’t have a budget or don’t stick to one.
7. You Haven’t Learned About Personal Finance
“Most people are broke because they don’t learn about personal finance,” said the founder of Lazy Man and Money. He added that one example of the dangers of debt is that it has compound interest working against you instead of for you as it does with investments.
8. You Put Today’s Happiness Before Future Financial Needs
Poverty is often generational, according to Luke Landes, a speaker and personal finance writer at Consumerism Commentary. You might be poor simply because your family always has been, “which is one of the hardest environments for making progress,” Landes said.
9. You’re Not Making Savings a Priority
“In my own life, I saw the biggest financial stagnation when I wasn’t paying myself first, even when I had a nice-paying job,” said personal finance expert Philip Taylor of PT Money. “When you get paid, make sure you are saving those first few dollars for your future.”
10. You Don’t Have a Money Plan
The biggest reason people stay poor, according to Elle Martinez of Couple Money, is “not having a plan for their money.” “It is easy to hope that there is money left over at the end of the month, but many times, our behavior gets in the way.”