Did you ever wonder why some people never seem to be able to keep money around? They get paid on Friday and all the money is gone before Monday? Well, in this post we’re going to talk about 5 habits that might be keeping a person broke.
Habit #1- Not knowing your subscriptions
Subscriptions can add up quickly. You can have $5 here, $10 dollars there. You should take a moment and review your bank statement or credit card statement to see what monthly subscriptions you have. You also need to determine what you use and do not use. Cancel the ones that are not being used. Keep an eye out for what you are being charged for in your subscriptions. Sometimes subscriptions plans can increase in price without you being aware so if something you were paying 10 bucks a month for now turned into 20 bucks.
Habit #2 – Spontaneous Shopping
Who does not like shopping for new things; rather it be clothes, electronics, or even shoes? There has to be a limit to what people can buy based on their budget. One way people dig themselves into a deeper hole is by not realizing how much they are spending on things they do not need. If someone is in a bad financial position, they should not spend money on unnecessary items such as $100 pair of shoes.
Habit #3- Relying on Credit Cards
A person that relies on credit cards to make all their purchases thinking they can pay it off later and they will be fine, is likely going to stay broke. Credit card interest rates are typically around 13% or higher. Not paying off a credit card on time can create an untold debt that’s hard or nearly impossible to get out of. As of 2022 Americans have piled up about $925 billion dollar in credit card debt. Let that number sink in for a moment. Credit cards can be helpful when used properly but when they are misused, they can cause some trouble.
Habit #4- Failing to Budget
It is important to know how much money is coming in and how much is going out. Some people do not know how much money they are actually spending with the amount they are making. This can bring you into debt or maybe not having enough to pay for the necessities you need. Budgeting does not have to be difficult. It’s as simple as documenting how much you are bringing in a month and how much you have to spend just to maintain bills. You should create a budget that helps you monitor your financials as well as build up some savings so you don’t go broke.
Habit #5- Not Investing
Investing is a good way to help make your money grow. Invest in stocks, bonds, or rental properties to help receive passive income. The reason why people are scared to invest is because it involves risk. But, if you make smart and informed investments, you can minimize those risks and maximize your return. A lot of people believe in the old way of saving as much money as you can and use that to live off of during retirement. But we encourage you to strive to reach for success and get out of being broke. Think outside the box! Don’t just live in it like everyone else does.
Managing your own money can be somewhat difficult. But doing so will help save you from being broke. Click on the picture below to watch the video that further talks about the topics we just discussed: