Top Reasons Why Some People Are Broke

empty pockets

It has only been a week since you got paid and you realized that you no longer have money. You are probably wondering now where your paycheck went. What are you going to do? How are you going to survive until you get paid again?

Many people are actually in this predicament. They are already broke after receiving their salary just a few days ago. Why? Let us find out.

Not Following a Budget

This is the number one reason why a lot of people are broke. They do not follow their budget. Or worse, they do not create a budget at all because they think that everything will turn out okay. This is why their expenses get out of control.

If you do not set limitations, you would just go ahead and spend your money on whatever things you feel like buying. But if you have a budget, and you strictly follow it, you will clearly start to see how much you are making, and how much you are spending. You will have a clearer view of your expenses, and you will be able to identify which ones you need to prioritize. This will also allow you to save some cash.

Spending Too Much on Unnecessary Things

You are working too hard, and it is not bad to pamper yourself once in a while. You can go to the spa or to the mall and get yourself some new things. But then again, you have to check if you can really afford it. If the stuff that you want to purchase is unnecessary, you better hold your horses, or you will end up broke sooner or later.

Not Making Enough Money

Before you spend money on something, the first thing that you should ask yourself is whether or not you can really afford it. You need to make a list of all your monthly expenses, get the total, and see if you are even making enough money to cover all those. If not, then you might need to cut back.

If your paycheck is not sufficient to support your basic needs, then you must do something. You can look for a more rewarding job. You can also look for a sideline.

Abusing the Use of Credit Cards

It is fun to shop and swipe your credit card, but it doesn’t feel the same once you get your bill. Whenever you charge something on your card, always make sure that you have money coming to pay for it. Otherwise, you might end up paying the minimum amount, and that is when the interest starts to pile up.