This weekend, I made a shocking discovery about a friend – she’s broke! To make the situation worse, she’s not just broke; she’s also in heavy debt. I was so surprised to hear that a well put-together, professional woman who seemed to be in control of her lifestyle could be in such a situation. The reality is, we can all fall into that trap if we’re not careful about our spending habits and keeping our budget in check.
So dear broke ladies, here are the five reasons why you’re still broke:
1) You are thoughtless about your purchases
In my friend’s words, she doesn’t know the difference between a purchase worth $5 and $50. When you don’t pay close attention to the amount that you’re spending and how you can save on those purchases, you are bound to overspend. Simply put, my friend doesn’t care if an item is on sale or at full price, nor whether she could find it at a cheaper price at a different store; she wants to make the purchase at that precise moment and no number will get in her way.
You know what works better when purchasing? Take a moment to think about it: do you really need the item? Is it the best price you could get? Are there cheaper alternatives?
2) You haven’t planned a budget
Without imposed limits, you have no idea how much you can or should spend on your monthly needs and desires. A budget can do wonders in keeping your finances organized and ensuring that you reach whichever goal you want – whether it’s saving a certain amount of money each month, or breaking even.
Setting up a budget and understanding your monthly allowances is key in ensuring that you don’t spend over your financial abilities.
3) You’re being irresponsible with your money
Guess what ladies… restaurants, new clothes and trips are expensive! Sure, we all love to spoil ourselves from time to time with some delicious gourmet meal at a fancy restaurant or a beautiful new pair of shoes. But do you really need to purchase a new outfit each weekend or buy a daily cup of expensive, fancy coffee every morning?
When times are tough, you need to start focusing more on staying away from unnecessary shopping and more on making some home cooked meals!
4) You’re not evaluating your recurring expenses
Believe it or not, there are better deals out there waiting for you. You don’t need to stay with the cell phone provider who is charging you the same price as back in 2005. You can switch over to better, more affordable deals that make more sense for you financially.
Take a day and sort out your monthly recurring expenses. Cell phones, landlines, cable, and internet are just some of the services you can find better deals for. Call them or do some online research and make some money-saving magic!
5) Your priorities are all wrong
Simply put: if you are in debt and can’t afford to spend an extra $40 to pay off a credit card debt, then you should not be going on a two week vacation! Some people who love to spend skimp on the important, higher priority expenses like bills and ignore the costs of expensive, bad decisions, like travelling or buying a new car.
Be thoughtful about covering your daily and monthly necessities first and foremost. The rest can come when you finally move away from debt!