5 Reasons Why You’re Absolutely Broke

by Jackie Cohen on April 5, 2018 · 2 comments

Reasons why you're absolutely broke?Supposedly about a fifth of Americans are broke — or so in debt that they might as well be broke. It’s usually not due to a single cause but rather several that exacerbate each other. Here are five reasons why you’re absolutely broke.

1. Overspending

If you feel like you can’t make ends meet, maybe you’re spending more than you make. Either get a higher-paying job or cut down on spending. Most likely you’re buying things you don’t really need, replacing things too soon or being overzealous about luxury items. Until you find a way to live within your means, the feeling of being broke won’t go away.Reasons why you're absolutely broke

2. Too Much Borrowing

Certain types of debt are necessities — like auto loans, financial aid for school and mortgages — but once you start taking on more than that, your indebtedness can snowball. Once your outstanding credit-card balances exceed what you can pay back within a few months,  you’re on a slippery slope. At a certain point, you need to stop borrowing anything new or you’ll end up broke.

3. Bad Habits

Classic bad habits are smoking, gambling and drinking alcohol, but a bad habit could be anything that costs money you don’t need to be spending — like that daily cup of coffee or the three sodas that you drink each day. It doesn’t even have to be buying things. Being lazy and sitting in front of the TV five hours a day instead of working on making yourself better is also a bad habit that hurts wealth creation.

4. Poor Health

Getting sick can drain your finances and push you into bankruptcy if you’re not careful While you may not be able to control all aspects of your health, there are certainly steps that you can take to make sure that you’re as healthy as you can possibly be. Eating right, getting exercise, taking preventative measures, getting annual check-ups and taking care of medical problems before they become truly serious all put you in a position to live a healthier life.Five reasons why you're absolutely broke

5. No Emergency Fund

Having the proper insurance for when things do go wrong is an important aspect of making sure that you don’t squander the wealth that you have already created. Understanding the risk that things could go wrong and taking the appropriate actions to prepare for them is essential if you don’t want to suddenly lose all your wealth to a disaster.

Reasons You’re Broke

If you spend more than you make that could keep you from being able to save and invest. Most likely there are several reasons you’re broke. Fortunately, it’s never too late to start trying to turn that around.
Readers, how many of the things in this story resonate with you?

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{ 1 comment… read it below or add one }

1 Ramona April 12, 2018 at 9:57 am

Vices: smoking or drinking. These can really add up to some horrible money losses each month.

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