Finance Globe

U.S. financial and economic topics from several finance writers.
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5 Bad Habits of People Who Are Always Broke

5 Bad Habits of People Who Are Always Broke

Some people experience major setbacks that lead to financial instability. Unfortunately, for people who are always broke, the root of the problem is in their own decisions and habits. If you don’t want that person to be you, avoid the bad habits of people who are always broke.

They’re waiting for a magic fix. It may be a tax refund, a bonus, a raise, an inheritance, or something else, but people who are always broke are often hoping for dramatic to change their financial situation. Sure, a handful of people are lucky and win the lottery, but without good financial management skills, many of these people find themselves back in a financial slump. If you want to avoid being broke, take responsibility for changing your financial situation so that if that windfall never comes, you’ll still be ok.

They blindly spend on non-necessities. A bad financial cycle is a habit of unplanned spending on things that aren’t necessary keeps many people in a bad financial cycle. You don't have to put yourself on a strict budget. It’s ok to have a little “fun” money that you spend on things that make you happy as long as you've planned for it and can afford it.. Spending on some of your “wants” will prevent you from splurging later on. 

They have other bad habits. Money troubles are often linked to other bad habits like a shopping or gambling addiction, procrastination, or lack of organization. If you want to improve your financial life, improving other aspects of your life will help. For example, if you’re constantly missing bill payments because you’re not organized, coming up with a better system can help bring your finances under control.

They lack commitment to strong financial goals. Those with the best finances have specific goals they’re working to reach. And they have a specific timeframe for reaching those goals. On the other hand, people who are often broke lack these kinds of goals and a strong commitment to the goals they’ve set. Simply wanting to save more money isn’t enough because you don’t know how much to save or when to save it. A good example of a strong goal is to save 10% of your income from each paycheck or to pay off $5,000 in credit card debt this year. This gives you something more concrete to work toward.

Once you've set a goal, being strongly committed to it will keep you working toward your goal even when you're not feeling motivated. Keeping your eye on your goal will help you make better decisions about how you’re spending your money.

They have the wrong friends. A popular motivational speaker contends that a person is the average of the five people they spend the most time with. If habits and behaviors are truly contagious, one explanation for being broke is constantly spending time around others in the same financial situation. You don’t have to ditch all your friends. You should, however, become more aware of how your financial decisions are being influenced by those around you. Of course, it won’t hurt to make some friends or acquaintances who are doing better financially.

 

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Comments 1

Frank on Monday, 22 May 2017 10:55

I found people who are always broke are very emotional about their financial decisions. They lack the quantitative analysis needed.

I found people who are always broke are very emotional about their financial decisions. They lack the quantitative analysis needed.
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Monday, 14 October 2019

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