Wondering why you are living paycheck to paycheck?

We’ve all been broke at one point or even every point in our lives. We just don’t know where our money goes every month, and if we do, we don’t know how we can turn this around.

The only way to break the cycle of being broke is by changing our ways. Nobody else is going to help you change other than yourself.

Here are some reasons why you are broke and what you can do not to be broke. Number 33 is a must read for anyone (especially single men and women) ready to be financially free.

1. Keeping up with the Joneses

‘I need a new car, but do I really need it?’ No, you don’t!

‘Laura next door just got a brand-new Maserati. I’ve got to upgrade too. I’ll just refinance my 2017 Mercedes for a brand new one. I must keep up with the class.’

Keeping up with the Joneses is a bad money mistake you can do, and it will end you up in a very bad financial situation. Why keep spending money you don’t have to buy things you don’t need to impress people you don’t even know?

Sadly, we live in a society where people put importance on being equal or better than another. Thus, we feel the need to keep up with the latest cars and fashion to be like everyone else.

Don’t go into debt to look like the Joneses. What you may not know is that the Joneses may actually be broke. And if they are not, they may eventually go broke.

2. Marrying for looks and not brains

Who cares if she is bad with money? She’s pretty and that’s what matters.

It will matter when you can’t afford to pay for her pedicure. It’s important to not overlook other character flaws. Looks fade, but a person’s personality matters. If someone is the most gorgeous person on earth, but they have the worst personality, chances are they are not going to change overnight.

This is one of the reasons why people go broke. The good looks will not help pay the bills. Smart brains will.

3. Not having the money talk before marriage

One of the reasons most married couples are broke is because of failing to discuss about money before marriage.

‘Well, that will be mean of me to ask about his finances. That’s a taboo topic.’

Would you rather find out someone is in deep debt or generally bad with money while married? I guess not. Discussing your finances before marriage will enable you to know how someone manages their finances. You will be able to decide beforehand if it is something you are ready to accept and work with.

4. Failing to read

I’ve got to catch up on the new season of ‘Keeping Up with the Kardashians. I’m too busy. I’ve got no time to read.’

If you know every episode of every reality TV show but can’t name a single book you have read, you have a serious problem.

You keep up with other people’s lives while forgetting to keep up with your own. Watching TV is not wrong. It is wrong if it is the only thing you do when free. Have a balance and set time for things that will build your life for the better.

People who read are knowledgeable, smart, and successful. Reading equips you with skills to tackle life. In the case of money, you will know how to better manage your finances.

5. Having wrong friends

Friends are good, but not all friendships are good for our finances. Just because your friends can afford to go out several nights a week and spend hundreds of dollars on entertainment and dining out, it doesn’t always mean you can. You may not know their financial situation. They may have that extra cash to spend or may be racking all these bills on credit cards.

If you tag along with your friends 3 or 4 nights a week, this could be one of the reasons why you are broke. If your friends are not accommodating of you, it may be best to find new friends who will help you grow financially.

6. Making the minimum payments on credit cards

I don’t have cash for this, but you know what? I’ll just use my credit card. I can afford to make the minimum payment.

No, you dont! Actually, if you can’t pay cash for it, you can’t afford it.

Doing this will lead you to a big financial disaster. Credit cards are good if used wisely. This is by ensuring you don’t use more than 30% of the available credit and paying off your balance in full every month. By doing this you avoid paying interest to the financial institutions thus saving yourself a ton of cash which you could put towards your other financial needs or savings.

If you have ten credit cards all maxed out and are making the minimum payment, this is one of the reasons why you are broke every month. You would rather get rid of the credit cards and devise a plan to pay them off. The snowball effect is an effective way to get rid of your debt. This, together with budgeting, will give you a huge sigh of relief and you will be surprised how much money you could save every month.

7. Negative mentality with money

Having such thoughts could leave you living paycheck to paycheck forever:

I don’t make enough money to save.
Having more money only causes problems.
What’s the point of being rich?
I make too little. I’ll never pay off my debts.
Investing is hard.
I will never get a promotion.
I’m too old (or i’m too too young) to start saving for retirement.
I’m bad with money. I can never get it right.

This mentality will prevent you from working harder and improving your financial life.

8. Having children before you are ready

If you have children, you know that they are not cheap. Children come with the cost of daycare, hospital bills, health insurance, to name a few.

Having children before you have a clear plan may leave you broke. Plan ahead so when you start having kids, expenses like daycare costs don’t throw you off.

9. Being an enabler

There are many people ruining their own financial health to help people who are financially irresponsible.

Your first responsibility is to you and your family. You cannot help others when you cannot help yourself. Charity begins at home. Start saving for your kids college tuition, an emergency fund, and your retirement so in the future you don’t become a burden to others.

11. Student loans

Getting an education is very important, but don’t go broke trying to get one. If you can work extra hours to pay for you college tuition, the better. You don’t have to go to an Ivy League college to make it in life. If you have a full scholarship, then of course, but if you must take out a student loan just to go to Yale, no!

You can save a ton of cash by going to a local state university and performing just as well or even better. And if you must take out a student loan, make sure your choice of major will get you a good paying job after graduation so you can be able to pay back the loan as well as meet your expenses.

12. Poor career choices

Some careers are not worth wasting your time on. As soon as I graduated from college, I regretted the career path I chose. I struggled for a year to get a job, and when I got it, the pay was not worth my time. I thought of how many years I would have to work to save just $10,000.

I decided, no. If I must make it in life, I must change my career path. This is a risk I had to take. I spent six months training in a different career path and got a job within a week of completing my training.

Sometimes you have to decide what matters most to you. If you plan to be financially stable, or even become a millionaire one day, you have to reevaluate some things in your life.

13. Not having a job

If you don’t have a job then you must be financially dependent on someone. This could be a spouse, parents, or worse off, a boyfriend or girlfriend.

There’s nothing wrong with being a stay at home parent. But if your household is always broke or straining the only working partner, it may be wise to get a job. If both spouses work, you raise the household income, meaning you will be able to meet your expenses and start saving for the future.

14. Not taking risks

Nothing comes easy. To make it in life you need to take risks. Be it starting a business, investing, or making life changes that may lead you to lose some things such as friends. As long as it is good for your future, your finances, and your family, go for it.

15. Failing to have a budget

If you wander why you live paycheck to paycheck you probably don’t have a budget. A budget helps you to know where your money goes every month. You will be prepared for emergencies and day to day expenses and you won’t be thrown off by an expense because you had it in your budget and knew it was coming.

16. Having ‘I can’t’ mentality

Start believing in yourself and see how much difference it will make in your life.

“I can’t start a business. I don’t have the skills.” How about you learn the skills and change this to “I can?” Everything is possible with a positive mind. Most entrepreneurs out there started from nothing. By taking risks and learning along the way they became better and eventually best in what they do.

17. Thinking being rich is for a special class of people

Anyone can become wealthy, no matter what their income, by thinking about money in a more pragmatic way. Increasing your earning potential, budgeting, and saving might help you reach financial freedom.

Do you know most millionaires are self-made? They did not inherit their wealth from family or win a lottery. Thus, anyone can be rich, but also not everyone can be rich. With hard work, and sacrifice, you can be a millionaire too. But all this hard work and sacrifice can be useless if you lack a plan and goal. Why? Because you will lose the money as soon as it comes in.

Why do you think most of the NBA players go broke and bankrupt while they make millions of dollars a year? Yeah clearly. It’s a lack of discipline with money.

18. YOLO… Living in the moment

Why should I make all this money and drive a 10-year-old car? Why should I live in a 2-bedroom house while I make $200,000 a year? Life is too short to live like a poor man. You only live once.

You’ve probably heard someone in your life say these words, and in fact convince you to spend like there’s no tomorrow. So, you spend with no care that you will retire one day, or that you may have an emergency. But so long as you can meet your current needs, you are good. After all we don’t know about tomorrow.

And then you keep wandering: Where does my money go every month? No matter how much I make I’m always broke.

Don’t ask buddy, you have the answer loud and clear.

19. Being dependent on people

How can I survive without you?

There’s no greater satisfaction in life than being independent. Whether you are a stay at home parent, or a single parent, have a plan for when things go south. Being financially independent is very rewarding and self-fulfilling.

Also, being dependent on others makes someone lazy. This is because you know you have someone to fall back to, thus you may not work as hard for yourself. But what happens if that support no longer exists? You will be in a very bad financial situation.

Work hard to have your own money and you won’t have to worry about being broke.

20. Not making enough

If you want to achieve financial freedom, you need to make more. Sometimes running broke is not as a result of bad money habits. It may be because you just don’t make enough. So what’s the solution to this? Making more. Have a budget and know how much you are short every month. Get a second job, or work overtime to cover the difference, and even have some extra to put towards your savings.

This may not be what you want to hear. We all want that free time for leisure and pleasure, but trust me having not to worry about money will give you peace of mind you’ve never had.

21. Lack of an emergency fund

A study by Bankrate shows that nearly three in 10 (28 percent) U.S. adults have no emergency savings. One in four have a rainy-day fund, but not enough money to cover three months’ worth of living expenses. This is a serious financial problem. And this is how most people end up even more broke.

Let’s say you get an emergency that requires $10,000. You live pay check to paycheck and have no savings or an emergency fund in place. But you have a $10,000 limit credit card. So, in order to cover for the emergency, you either charge it to your credit card, take out a loan or depend on family and friends. Thus, you end up in debt and in a much worse financial state than before.

What if you had an emergency fund of 3-6 months of living expenses? You wouldn’t have had to worry about how to cover for the emergency.

It is very critical to have 3-6 months’ worth of living expenses saved in liquid cash for emergencies. If you haven’t already, start now. Whatever you can put aside every month will go a long way.

22. Not investing

Do you have any investment? The best way to avoid being broke is by making your money work for you. Having passive income alongside active income will help you meet your financial needs as well as save for retirement.

Related post: The 10 Best Passive Income Sources

Having multiple streams of income will ensure you are covered and don’t have to worry about your finances.

23. Making impulse purchases

Have you ever bought something on impulse and as soon as you buy it you are like: “I wish I shouldn’t have bought this.”

This is especially with big purchases like a house, furniture or a car. You may find there are cheaper options or a coupon you could have used to save. A good rule of thumb is to wait 24 hours before making any big purchase. During that time, do a little research to compare prices, or find coupons. In fact, you may realize you don’t really need the item.

Buying on impulse could get you broke and stressed over your finances. Especially if you put the purchase on a credit card. Avoid impulse purchases and you will be better off financially.

24. Thinking generic brands are for the poor

To be honest, generic brands are just as good as name brands, and they are way cheaper. They are the exact same product as the name brand. If you feel this is untrue, why don’t you give it try. Buy generic brands for one month and let us know if they taste or work any different than name brands.

25. What is couponing?

Couponing is for those who value their money. Not for the broke. If you think those who use coupons are broke, you have no idea. They are people who are smart with their money. They want to save.

I f you can save $100 a month with coupons, guess how much you could save in 5 years. A lot.

26. Happy Friyay! Where’s the party at?

You are broke but you must be at every party and event. Every weekend you are out with friends partying and dining. You fear missing out. Just because your friends go out every weekend doesn’t mean you have to go too. You don’t know their financial situation. They may have that budgeted for or they may be racking up credit card debt.

If you are broke every month you may have to put a halt to this kind of lifestyle and use that time to recover from your financial mistakes. Put the money you’ve been spending out into savings and you will be surprised how much you’ve been wasting.

27. Making minimum payments

So you think: “Great! I only need to make a $25 minimum payment a month. I can afford to buy some extra stuff.”

No, you don’t! you are in debt and are getting yourself in a serious financial problem.

Let’s say you got a $1000 balance in your Macy’s credit card and make $25 minimum payment. The interest is $20 a month. And in fact, since you are always broke, you are late on some payments. This is an additional $35 late fee. And you wonder why you are broke every month?

Making the minimum payment on your credit cards and loans is one of the reasons why you are broke.

28. Buying stuff because they’re on sale

One of the reasons why you are broke is buying stuff just because they are on sale.

You think: “Yay! It’s 50% off? I got to have it.”

No you don’t. Just because something is on sale doesn’t mean it’s a good purchase, especially if you are buying on credit. You shouldn’t be adding more debt on top of debt.

29. Buying stuff you don’t need

You think: I don’t need it, but you know what? I may need it next year, or ‘I will grow into it.’

Well, why not hold off and buy it next year when you actually need it? Chances are you will never use it. It’s better to only buy the things you need than things you hope you will need.

30. Instagram got to see this

Some people flaunt on social media for likes and followers while behind doors they are drowning in debt. Most of these ‘friends’ or followers don’t care. Unless they put money in your pocket, that is, if you are a social media influencer, then yes. Otherwise, if all those expensive trips, clothes, or dinners you are posting are leaving you broke, then you know why.

31. Going shopping on an empty stomach

One thing my mama taught me is ‘Never go shopping on an empty stomach.’ My mum ensured we were well fed before we went out shopping. You know why? So we wouldn’t get her broke.

When you go shopping on an empty stomach, you tend to buy foods that are pleasing to the eye, and not necessarily what you would eat on a regular basis. And you also end up buying too much food you don’t need.

Two days later you are like, ‘Why in the world did I buy this?’ Or the food sits in the fridge till it goes bad. Always go shopping on a full stomach. You will save a ton of cash.

32. Always eating out

If you are always like: “Where are we going out for dinner today?” You only one of two things: very broke or very rich.

Eating out is expensive. While it is okay to eat out occasionally, make sure it is included in your budget. Otherwise, you will spend too much money on dining and keep wandering where your money goes every month.

In fact, as Dave Ramsey says: “If you are in debt, you shouldn’t see the inside of a restaurant unless you work there.”

Pay off your debt and have an emergency fund and retirement plan before wasting money on stupid purchases. You will comfortably do these things when you are financially secure.

Failing to change this is one of the reasons why you are broke.

33. Having multiple relationships

Do you have an idea how expensive it is to have multiple relationships? I’m not speaking from experience, but I have witnessed may people, especially men, go broke from this.

This is especially true for people with children from multiple partners or have multiple divorces or relationship partners. Child support and alimony and all the dates you have to pay for are getting you broke. There’s no going back when you have kids. You must support them no matter how broke it is making you. That’s why it is important to think twice before having children, especially with someone you are not married to.

If you are having children with different women or having multiple relationships, this is one of the reasons why you may be broke.

Final Thoughts

Only you are in control of your life. Changing your mindset about life and money is a big step towards being financially successful. If you are still wondering what to do when you are completely broke, refer to the reasons above. You will be surprised how your life will turn around for the better.