Why You’re Always Broke
Do you live paycheck to paycheck? A lot of people do.
Frankly I don’t know how people afford to live. Folks have a lot of payments they have to make AND they have to feed themselves and their kids.
I am single so life is pretty simple.
One of the reasons I choose to live a minimalist lifestyle is to not spend money on useless crap. If I want something I save and pay cash.
Most people don’t do this. They pay on credit and then end up on the credit treadmill. Never paying off their balance and thus paying super high interest.
So what about your paycheck or how much you make at your job.
Most people think that life would be so much better if they made more money.
Let’s take a look at that.
First of all you have to look at real income. How much does your job cost you to be there? Your commute, clothing, gas, car payment, etc.
This is going to upset you.
If you make 45000.00$ per year, your real income is probably less than minimum wage. Sit down and figure it out.
Here is another way to figure it out. Take your gross salary, drop the zeros, divide it in two, and this gives you your gross hourly wage. You take home about 2/3 of that.
Starting to see the problem?
The other part of this is that you have too many payments.
Mortgage(how much will you have “paid” for your house when it’s paid off?)
Cell phones, internet, cable.
Car payment(plus interest).
Various other credit cards.
There just isn’t enough money to go around is there?
So what does your personal balance sheet look like?
Assets on one side, liabilities on the other. And your house is a liability until it is paid off!! Even then it costs you money in the form of taxes and maintenance.
How do we correct this?
First off, buy less stuff! I am not saying that you have to live a minimalist lifestyle(but it does make life a lot easier!), but just look at how much stuff you have and how much you spend on a weekly basis. Five dollars a day is 150.00 a month. If I asked you for 150.00$ every month you’d laugh. But this is what some of you are spending on coffee, doughnuts, chips, etc.
And what if you smoke?! Good grief. Why not just let me punch you in the face for a few minutes a day? It would be cheaper. Sorry, I digress.
You need to cancel all things that are frivolous expenses until all debt is paid off.
How dare you complain about not “making” enough money and yet continue to have a cell phone or gym membership!(These are just examples)
Leave your debit/credit cards at home. If you have them you will find a reason(excuse) to spend money.
These fairly basic money management skills are lost on most people. They have no idea how much they make or how much they owe. Just bury your head in the sand.
Why is it that a lot of folks just do not want to look at their personal finances and come up with an aggressive plan to get out of debt. If they took the necessary steps it really would not take that long.
Of course you should stop going further into debt as well.
Your paycheck is not the problem.
It is not how much money you make but the decisions you make with that money that determine your financial health.
You can stop living paycheck to paycheck. Sit down and start planning how you are going to do this. Now.
Please share this with others and feel free to comment.