Recently I wrote a post on 9 Successful Habits of People Who Are Debt Free. Today, I want to share some of the habits of people who are not only broke but are also living paycheck to paycheck. I describe these behaviors as the 7 Silly Habits of Broke People.
I believe we can learn about the lives people lead, just by looking at their actions. Just like actions speak louder than words in your personal relationships, the same can be said about your finances.
Without knowing someone’s salary or the amount in their bank account, I can make a good guess on their financial health just by the way they treat the money they have.
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7 Silly Habits of Broke People
1. Broke People Look for a Fast Buck
A broke person wants fast cash. They want it and they want it now. Instead of putting hard work into making and building money, they’ll look into activities such as buying lottery tickets or gambling at the casino.
Everyone wants to be a millionaire, but no one wants to put in the hard work it takes to get there.
No wonder why those ‘Get Rich Quick’ seminars are always packed.
For a broke person, the possibility of becoming rich outweighs putting the work in now to grow their wealth later. Looking for a fast buck will probably put people in the poor house quicker than anything else.
Taking money out of their budget with the hope of making more money, is irresponsible and keeps people broke.
2. Broke People Depend On One Source of Income
In this day and age, every person out there should have at least two, (preferably more) sources of income. For most people, this will include their job and something such as a side hustle, real estate, or anything else that will bring in additional funds each month.
Broke people depend solely on their job for income and are devastated when it is taken away from them.
Even if you have a great career making a great salary, no job is ever 100% guaranteed. No one knows when their company will go under or go through a merger and start laying off people.
There are a lot of factors out of your control, such as when government legislation ended one of my tutoring companies main source of income. Putting all of your eggs in one basket is dangerous and a job loss can have devastating effects.
3. Broke People Live Their Lives Without a Budget
Fail to plan, plan to fail. This is true in life as well as in regards to your budget. Having a plan for how you will spend the money you earn each month will allow you to visualize where your money is going.
Broke people don’t have budgets. They can’t be bothered to sit down and create a budget, and often think they’re for poor people.
Look, if you have no clue where your money is going each month, you are unaware of your financial health. You will spend money you don’t have and you will continue to live paycheck to paycheck.
4. Broke People Allow Others to Control Their Wealth
Broke people tend to allow others to make decisions for them about their finances. They’ll allow their spouses to have total control over their budgets.
They’ll cosign for people who have proven they are financially unworthy to get a loan on their own. They will also do crazy stuff such as spend money that should go towards their retirement on their children’s fancy education or a $50,000 wedding.
One of my favorite financial books is Gold Diggers and Deadbeat Dads by Valerie Rind. Though this book is geared towards women, primarily, it speaks volumes how other people can wreak havoc with your finances – if you let them.
Broke people don’t feel confident about their own finances, so they leave it in the hands of others. Almost as if their problems will disappear if they don’t see them.
Trust me, they won’t.
5. Broke People Spend Money on Items that Depreciate
Broke people spend money on items that depreciate instead of those that appreciate. A broke person would rather spend money on a car that depreciates as soon as they drive off the lot instead of putting that money on a down payment towards a house.
They want to look good dressed from head to toe but don’t have two nickels to rub together in their pockets.
It’s okay to have nice things; just get your priorities right. Broke people feel as if they deserve to 50-inch televisions all throughout their apartment. Or drive a car that costs as much as some people spend on rent or mortgage.
6. Broke People Do Not Save or Invest in Themselves
Broke people will wear designer bags, but don’t have a 401k or a savings plan. They don’t pay themselves first but instead save what’s ever left from their paycheck.
A broke person will scoff at spending money on a class that will teach them how to make more money but will gladly use it to buy a Luis Vuitton handbag.
Most people in America have little in their savings and according to Market Watch, 62% of them have less than $1000 in savings.
Considering how most people should have at least 3 to 6 months of their income saved up, there’s no wonder why an event such as job loss or illness can have devastating effects.
7. Broke People Are Hasty in their Financial Decisions
A broke person will buy on impulse. If they see something they like, they will buy it. There’s no thought made if this is something they really need or can afford. I call these type of people “emotional spenders”.
They will make purchases of items because they feel they deserve it or they feel sad about something and buying that 60-inch television will make them feel better.
When purchases are made without thought or pause, this has an effect on someone’s overall life. Broke people will not take in consideration that mortgage is due in two weeks or that their car needs to be serviced now.
They know that they see something and they have to have it right now. There’s no thought made into how these purchases will affect them long term.
Some Tools You Could Use
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Simple – Bank online and get a debit card with no fees. This is great for people who don’t like traditional checking accounts or need separate places to save for the holidays or an upcoming vacation. Sign up for your free Simple account.
Credible – If you have student loans you may want to consider refinancing them to make them more manageable. Check out Credible to see if they offer options for your situation.
Ebates – If you shop online, why not get cash back on your purchases? You can earn money from doing something you were going to do anyway. Sign up with Ebates for free and earn $10.
American Consumer Opinion – Earn money with surveys with American Consumer Opinion. One of my favorite companies which are reputable and fun to complete. Sign up with American Consumer Opinion for free here.