You ever wonder why at the end of the month, you never seem to have any money?
You think to yourself, I make decent money, but why when I look at my bank account, there’s just never enough in it.
Don’t feel so bad, according to a CNN Money article, 40% of Americans wouldn’t be able to cover a $400 emergency.
It’s easy to make the excuse that you don’t make enough money, and for some, that may actually be the case.
But for many, this comes down to a money management problem.
So for those that struggle with putting a finger as to why you’re broke, below are 6 reasons why this may be the case.
1. You Spend More Than You Make
When you sit down and really think about why you’re so broke, it comes down to simple math.
If you spend more than you make, you’ll end up with nothing at the end of each month. It’s funny because the same could be said when trying to lose weight.
If you burn more calories than you consume, then you will eventually lose weight. Of course both situations aren’t always so black and white.
There are internal and external factors that contribute to both situations.
That being said, those that manage their money well, understand that if you spend less than you make, you will find yourself with more money.
2. You Think Talking About Money Is Bad
It’s amazing how much people don’t like talking about money.
If you do talk about it, you either pegged as someone that only cares about money, or someone who likes to brag about money.
When in reality, it’s just an insecurity people have about themselves.
Most people are too embarrassed to talk about money, because they know that they don’t have enough of it.
But what most people fail to realize is, talking about money helps you to better understand how it works.
The more you understand it, the better you will get at managing it.
But people would rather stick their heads in the sand and hope that their money problems will just go away.
There’s a reason why wealthy people hangout with other wealthy people. It’s because they aren’t afraid to talk about money, which isn’t a bad thing.
3. You Prefer Spending Over Investing and Saving
I get it, spending money is an amazing feeling. You get to buy the things you want, giving you that immediate gratification.
The problem is, that feeling goes away pretty quickly.
What doesn’t go away is the comfort of knowing you are secure financially for the long term.
You see, if you’re someone that is looking to increase their net worth, then you should know that spending doesn’t help that cause.
Investing and saving gives you the ability to increase it. I’m sure you’re telling yourself that if you had enough money, you would save and invest more.
But I can almost bet that not to be the case.
It doesn’t matter how much money you make, the reason that you don’t do it is because you don’t think it’s possible to increase your wealth.
If you did, you would make it a priority. I like to tell people that the difference between wealthy people and everyone else is...MINDSET.
You believe that wealth is meant for a certain type of person. Therefore you don’t make the commitment to build it for yourself.
If you can learn how to reshape your mindset about wealth, you will start to realize the importance of investing.
4. You Have No Idea Where Your Money Goes
As a former certified personal trainer, it is well known that losing weight comes down to simple math.
If you burn more calories than you consume, you will see yourself losing weight. Well, the same thing could be said about having money.
If you spend less money than you make, you will come to find that you have money at the end of each month.
The problem is, most people who struggle with money do the opposite.
They tend to spend more than they make, then wonder why there’s nothing left at the end of the month.
Which is why it is important to have an idea of where your money is going.
If you did, you would come to find out that you are spending a lot of money on things you don’t really need.
Like subscriptions to magazines you don’t even read. Or maybe all the fast food you buy instead of cooking at home.
Regardless of what it is, knowing where your money is going is key to getting out of the broke zone.
5. You Would Rather Blame Someone Than Find A Solution
It’s so easy to blame others for why you’re life isn’t the way you want it to be.
Whether it’s the government, rich people, or someone from a certain group. Putting the blame on someone other than yourself takes the burden off of you.
But one thing blaming others doesn’t do is fix your situation.
See, you can blame whoever or whatever you want, but the problem is still there. So instead of blaming, focus on finding a solution.
Also, learn how to be accountable for how your life has turned out. Because no one will care as much as you do about making it better.
6. You Hang Out With The Wrong People
I’m sure you’ve heard the saying…
“You are the average of the 4-5 people you hang out with, most of the times.”
Having the right people around you is so crucial to your success. Being around people that motivate you to do better is something we should all strive for.
But for some reason, many of us tolerate negative energy in our lives.
If you’re tired of being broke, and living paycheck to paycheck, see if you can find like minded individuals that are working on improving their financial situation.
Because I can tell you from experience, making changes that can improve your life for the better can be very difficult.
But it’s made easier when you have others striving for the same things. So just imagine how much more difficult you’re making your life by hanging around the wrong people.
7. You’re Addicted To The Plastic
This is something I am a certified expert in. Twice in my life I was able to rack up over 30k dollars of credit card debt.
So I know a thing or two about being reckless with the plastic. It’s so easy to spend money that isn’t yours.
Unfortunately, you eventually have to payback what you’ve borrowed.
And there is no better way to kill your ability to build wealth than by having credit card debt.
Unless you have the discipline to pay off your balance every month, you have no business owning a credit card.
Until you understand the consequences of spending money you don’t have, you should not be owning a credit card.
Now I’m not here to say that credit cards are bad. Because if used correctly, they can be a very useful tool for you.
But if you find yourself broke every month, then using your credit card is the last thing you should be doing.
Why Money Management Is So Important
Money management is only important if you’re tired of being broke.
If you’re someone that couldn’t care less about their finances, then managing your money won’t mean a thing.
But if you’re reading this right now, then I’m guessing that it is important.
So other than the reasons stated above, money management is important because it helps you create a plan to better understand your spending habits.
And if you plan on changing your situation, then you need to have a better understanding of it.
How To Manage Your Money Better
Track Your Spending - when it comes to losing weight, you have to make sure you record everything you are eating. Well, the same thing goes when managing your money. You need to know where everything is going, and cut out everything you don’t need. Apps like mint are awesome tools to help you track your spending.
Create A Budget - once you’re able to identify where your money is going, it’s now time to create a budget. I know how boring a word this is because I felt the same way when I started budgeting. But I read a book called profit first, and it broke it down for me in a way where it just made so much sense. All you’re doing with a budget is allocating money where it belongs. Having a budget ensures that you will always have money for the things you need.
Get In The Habit Of Saving With Purpose - don’t worry about how much you can save each month, focus on getting into the habit of doing it. If you’re able to both track your spending and create a budget, then finding cash to save shouldn’t be that difficult. Even if you have to save a hundred bucks a month, making this a priority will help you create better money habits.
Never Stop Learning - whether you’re reading, watching, or having discussions with friends and family members about money, continue doing it. Continuing to learn about money will open your mind to how to create more of it. This is what wealthy people do on a consistent basis. Platforms like YouTube have an abundance of content that discusses how to manage your money better. So there’s no excuse not to increase your knowledge.