Did you know that a 2017 report in MarketWatch found that half of American households currently live paycheck to paycheck? That means half of our country is barely getting by. That also means that half of our country would be S.O.L if an emergency came up. You may fall into this bucket, but should you? I’m sharing a few signs you shouldn’t be as broke as you are.
Before I get into the specific signs though, I want to stress that being “broke” is not something anyone should flaunt or speak into their life. If you are constantly calling yourself broke, it’s time to change your tune. I’d rather you say you are a work in progress! More importantly, if any of these signs apply to you, there should be no more reason to call yourself broke.
5 Signs You Shouldn’t Be as Broke as You Are
#1 – You know you make good money
If you find yourself living paycheck to paycheck but you know you make good money for your situation, something’s not right. It’d be a completely different story if you knew you didn’t make enough money, but when you acknowledge that you make good money, you should not be anywhere near “broke”.
All is not lost though! When you know you make good money, you can start taking the necessary steps to move away from the paycheck to paycheck lifestyle. The issue sounds like a spending problem more than anything else. Try going on a “spending fast” for a pay period or two. That means no unnecessary spending until the spending fast is over.
#2 – You know you spend a lot, especially on things you don’t need
Spending money is one of the quickest and most effective ways to go “broke”. This is especially true if you are spending money on things you don’t need. Are you fully aware that you spend more money than you should on unnecessary things? If so, it’s time to take ownership and get your spending under control.
You will always be “broke” if you constantly spend your money. The spending fast I recommended above would work wonders here too. In fact, it would probably be more effective for you if you spend money on things you don’t need AND you don’t consider yourself making good money. Give the unnecessary spending a break for a little bit, and watch how your situation changes for the better.
#3 – You put money into savings, but usually take it out
First off, let me say that I commend you for putting money into savings…regardless if you end up having to take it right back. At least you are actively trying to do the right thing with your money! Unfortunately, there is an issue with saving more than you should.
When you don’t have a solid budget that tells you what you can afford to save regularly, you run the risk of saving too much money. This usually means that other priorities can’t be taken care of, unless you pull your money out of savings. If you are putting money into savings, but usually have to take it out to cover bills and expenses, you shouldn’t be living paycheck to paycheck. You should be putting less into savings to ensure that your accounts aren’t dry.
This is assuming that you have control over your spending. I don’t believe your savings should cover indulgences or non-necessities. Your money should be staying in savings, in that case. If you have to pull from savings to cover bills, then you’re saving too much.
#4 – You make consistent money, but don’t have a budget plan
If you’re living paycheck to paycheck and you don’t have a budget plan, that’s a problem. In fact, if you don’t have a budget and you consider yourself “broke”, I’m going to need to you to create a budget ASAP. A budget will show you what money should be coming in, what money should be going out, and what money should be left over. This will tell you if you should be broke or not.
#5 – You are in the same financial spot year over year, but you make more money year over year
Finally, if you find that you are in the same spot with your money, year over year, then it’s a sign you shouldn’t be as broke as you are. Every year, we should be increasing our net worth, building our wealth, paying down debt and increasing savings.
Whether you make “good” money or not is irrelevant, because we should always be improving. Are you getting raises every year? Then, you really should be getting ahead. I’m not saying drastic improvements are required, but steady, continuous growth is a must! If you’re not doing that, something isn’t right.
How to Take Back Control of Your Money
Take it back to the beginning and start with basics
Now that you know the signs you shouldn’t be as broke as you are, and if any of the signs apply to you, it’s time to take back control of your money. To do that, start at the beginning and learn the financial basics. There are plenty of good books out there to help ensure you have the proper pieces in place. Check out 5 Books that Changed How I Handle Money for a few of my recommendations.
You can also check out the How to Take Financial Control Workshop I hosted live. I taught everything women need to know to take back control of their money and put themselves in a position to succeed. That training replay is available to anyone who needs it.
Get yourself on a budget plan
I mentioned this above but it’s so important that it’s worth repeating. You absolutely need a budget – whether you consider yourself broke or not. A budget is going to help you get clear on what your financial situation really should look like. From there, you can take the proper steps to break the paycheck the paycheck cycle.
Stop spending money on things you don’t need
I know, I know…easier said than done. However, when you can start controlling your spending and holding off purchasing things you don’t need, you’ll end up having more money in your bank account. More money in your bank account means “broke” status goes out the window!
I’m not saying you need to cut out the non-necessary spending altogether. I’m saying that your budget should tell you what can be spent on these things, and all of your other money goes where it’s supposed to. Everyone needs a little room for fun in their budget, they just don’t need to go crazy.
Work with a finance coach
Finally, the best way to ditch “broke” girl status is to make the investment in a finance coach (like me!) A finance coach is going to help you set up a budget, stick to your budget, and get to the root of your money and spending problems. At least, that’s what I do with my clients! If you can’t seem to fix the problem on your own, there is nothing wrong with seeking outside help.
If any of these signs apply to you, it’s time to turn things around! Schedule a free consultation with me and let’s talk about how we can turn your situation around!
Related: How to Save Money When You’re Broke
Remember, from here on out, you are no longer “broke”, you are a work in progress! If any of the signs above hold true for your situation, the time to make a change is now. Don’t procrastinate your financial success! Do you consider yourself broke? How do you plan to turn your money situation around? Post a comment below to share!
2 thoughts on “5 Signs You Shouldn’t Be as Broke as You Are”
Thank you, Raya. The “spending fast” idea is fantastic; it landed with me. I’m going to do that in tandem with setting up a budget.
This article is spot on for my situation and the steps you provided aren’t astronomical or overwhelming and the information is pertinent and practical so I can put it to use immediately. Cheers to you for giving voice to women and money as we’ve often been taught to handle it in a state of fear and scarcity (or not at all) and that gets us nowhere but broke and fast. Now, I choose differently. Let’s go!
Spending fasts are so helpful! Even if they aren’t very long. Thank you so much for the feedback – us women are capable of so much, so let’s get it!