Due to life’s expenses and poor financial decisions, it might become easy to simply accept that you will always be broke. Seeing your bank account constantly short of cash, living from one pay cheque to the other and with no savings, it can be quite easy to develop a cynical and defeatist mentality when it comes to finances. In this article, we shall be discussing the potential reasons why you are always broke.
Spending exceeds earning
This is one of the most obvious reasons why one would be short on cash. When one spends more than he or she earns, the financial aspect is not sustainable. Over a span of time, this leads to other problems where families cannot keep up with important commitments and may fall into poverty.
Wants before needs
This is a world where we are constantly tempted to buy stuff. The options for consuming are endless and it can be quite easy to spend money on things that you do not really need. Financing such items can be made easier through buy now and pay later schemes. When struggling financially, one would need to determine and establish priorities. Needs should take priority here and the wants must be postponed until the financial situation stabilises.
No savings and investments
People who have accepted that they will always be broke do not manage to allocate some money for savings or investments. With a bit of discipline of stashing away some income for savings, you can benefit from either an interest rate return, or else stock earnings by buying shares or making investments. The money saved will eventually become substantial following the discipline of sticking to this method for years.
Purchasing cheap items
When running on a small income, it is important to be mindful of expensive items that will not render long-term value. With that said, one needs to be careful when buying cheap items. What can happen is that the cheap items bought will drain more of your money simply because of lack of durability or the need for a replacement. In the long-term, cheap might translate to ridiculously expensive.
Lack of creative solutions
Managing your costs and saving money will only lead you so far. When one is cash strapped and has accepted being broke, there will be less drive to come up with creative income generating solutions. Not seeking additional sources of income will most likely leave the person being always broke or getting by with little.
With the current economic situation, getting accustomed to being broke might lead to longer term consequences.