I am broke is a slogan of many people. To some people the saying comes too often depending on their financial position. It is the desire of every person to be financially successful and off course wealthy. It is unfortunate some people will never realise their dream of becoming financially successful just because of the financial mistakes they make daily.
Several people have broken the chain of being broke by changing their mindset and habits. To break this chain, you need to first realise what is making you broke and then start working on it.
1. You have a wrong money mindset
Any success is as a result of having the right mindset. Right mindset is a vital factor towards financial success.Your perspective and confession about yourself determine whether you will have financial freedom. For example, if you keep confessing that you are Broke, you end up acting like a broke person. Your mind may make you comfortable even when you are suffering financially.
Having the right mindset include; believing that you can make it, setting your mind that you will start working, and finding intrinsic motivation to enhance your activities towards financial success.
2. Failure to plan your spending
In other articles, we have discussed the importance of budget. For you to experience financial success, planning is critical. A budget helps you to know what you can spend, save and invest. With a budget you can easily monitor your expenses by keeping them below your income. Planning control your money and gives it job to do for your financial advancement.
3. Spending more than you earn
This is in fact the main reason why most people stay broke. Once you spend more than what you earn, you are left with nothing to save and invest. In that case, you are likely to acquire some debts to cater for the current times.
Spending more than your income gives you a feeling that you are always running out of money. To avoid such situation, make your budget a friend and stick to it.
4. Lack of financial self discipline
Self discipline is the ability to stay on track with your plan. Many people struggle with this mostly when it comes to finances. Always we set our goals with good intentions, but as time progresses we loose the track. Financial discipline may be hard to maintain but we can decide from our mind that it’s a must stick to the plan.
Once you have a strong desire to succeed within you try and practice the self discipline. It takes your conscious effort to be self disciplined. Keep your goals clear and visible inorder to stay motivated. Incase you are struggling with your self discipline, find somebody who can hold you responsible for any financial action you take.
5. Procrastinate saving money
Wealth is build by saving money. However little it is, if accumulated for sometimes it is much. The biggest mistake people make is thinking that you can only save if you have much money. It is not about what you earn, but consistency in your action of saving.
If you don’t save when you have the little, even when you get much it will be hard to save. Saving little by little develop consistency and discipline.
Another mistake is thinking that you have enough time just because you have a well paying job. Anything can happen. Job security is not guaranteed.
Start by opening an emergency fund account as soon as you get employed. You also need to save for your future goals. Start saving early and if you have not started, start today. Procrastination is an enemy of success.
6.Borrowing all the time for everything.
Borrowing money for everything you want to do can be a habit. In most cases you get there if you do not have a plan of your finances. When you spend more than you earn you end up getting into debts telling yourself that you will pay with the next paycheck. By that time the bills will have got higher and will be difficult to catch up.
Getting out of this situation, you need to prepare a plan on how to pay your debts. Self discipline is also vital since you have to stop taking more debts. You also need to change your money mindset and develop a new habit concerning your finances.Determination and focus will keep you moving.
7.Competing with people
Our lives are characterized with different personalities, abilities and goals.Once you compete with other people, you loose your ability.
If you do things other people’s ways, you end up acquiring what you don’t require. You also buy things that you cannot afford inorder to impress them yet they care less. Trying to keep up with them may lead you in debts that you cannot probably be able to pay.
If you need to build wealth, live like no one else is now, so that in future, you can live like no one else can. Keep your focus onto your goals. It worrying what others think about you. Your biggest competitor is you not others.
8.Failure to invest
If you think you are Broke then you also believe you can’t invest. Investing is not only for wealthy people. You can also invest.
Investing is putting your money to work for you in order to build you more wealth. Like saving, people make a mistake by thinking they will do it later. You can start investing your little money for future benefits as early as possible.
There are several investment opportunities you can take even with your little income. For example, you can contribute to your 401k scheme and take advantage of any match they offer. You can also open an IRA to increase your savings towards your retirement while taking advantages of tax benefits. You can also get some professional in this area to get you started.
9.Failure to pay debts first
Paying debts may not be pleasing but should be done first. When a debt take long, it attracts a higher interest rate increasing your spending.
To clear your debt, select a debt pay method and follow it. You need to understand that paying that debt is temporary. Once you complete paying the debts you will have more money to spend. Start paying your debts and be wealthy.
You are Broke because you are afraid to fail? You are broke because you think trying and being committed will fail you. Most successful people have tried severally and didn’t give up on the way. You need to understand that you cannot succeed if you are overwhelmed by fear.
Start by taking an assessment of where you stand financially. Make a plan of your expectations. Have specific goals. Find ways to start working on them then start. Incase you fail, try again until you get there.
If you are Broke because of one of the above reasons, then you need to wake up. Find ways to start and build your wealth. Avoid living from paycheck to paycheck. Change your mindset that you are Broke and work on the root cause of your problem. Pay debts, save money, invest and build wealth. Start working on your financial well-being.