Middle-Class Money Habits Keeping You In The Rat Race

Do you hardly have any money left at the end of the month are you struggling to make ends meet if the answer is yes be very careful being broke can be a temporary thing but if you don't look into why you are broke it can easily lead to Poverty if you're tired of being broke all the time fix the problem now.

in this article, you'll find the reasons why most people are still broke :

you have no financial goals 

if you don't have goals and a purpose for your money it will be spent randomly you need to have goals so you don't go broke and therefore save and invest money if you want to have anything left over after you spend it determines where you want to be financially in the future this will help your decisions and behavior to align with that vision.

for example: if you decide to save ten thousand dollars this year you need to measure every spending decision you make between now and then against the question will it help or hinder your efforts to save ten thousand dollars honestly a simple question like this can mean the difference between impulsive spending and frugal living, in fact, I'd go so far as to say that small questions like this can make the difference between being broke or Rich.

you don't save money for emergencies

according to a 2018 Federal Reserve study nearly one-third of American households would have to sell something or borrow money to cover a four hundred dollars emergency now I don't know about you but this seems like a major problem especially since a four hundred dollars emergency is not something I would consider rare in fact I would consider it a small emergency go to an emergency room once and you'll know what I'm talking about.

if you don't prepare for financial emergencies you are setting yourself up for financial disaster and medical emergencies while common isn't the only risk what if your car breaks down, what if you lose your job,if you save three to six months of your regular expenses for emergencies you'll never run out of money because that money will stay in your savings account start with a week then a month and work your way up to putting aside everything you can and you'll never be broke.

You don't use a budget to manage spending

one of the main reasons most people are broke is because they don't live on a budget in fact according to a recent study by U.SBank only 41 percent of Americans stick to a budget and without a budget how do you know if you're on the wrong track with your finances you need to have a spending plan to avoid going broke knowing where your money is going is step one and managing it is step two.

a budget not only ensures that your expenses are less than your income but also allows you to plan what you can spend save and invest the richest people in the world have budgets they may not call them budgets but they certainly have plans for their spending saving and investing and if they do so should you the goal is to control your money and give every cent you earn a job to do for you.

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you compete with everyone

you can also call it keeping up with the Joneses or the Kardashians you find yourself buying things you can't afford to impress people you probably don't really like and who don't really care about you keeping up appearances and competing with others for material possessions distracts.

you, if you're guilty of buying things, to compete with others you'll need to add that to your list of reasons I'm broke stop comparing yourself to others you're striving to keep up your appearances you're spending too much and you're likely to go deeply into debt to maintain it all. if you want to create real wealth there's a saying that you have to live like no one else today so you can live like no one else in the future

you spend more than you make 

if you spend more than you earn you will always be broke waiting for your next paycheck no matter how much you make if you spend it all you will always be broke the inability to say no to things you can afford will keep you short of money because of your excessive purchases above your income level if you can't pay cash and have to go into debt you can't afford it if you are broke you can't afford it living beyond your means ensures that you will stay broke because of your overspending.

You have too much debt

Even high-income earners can go broke when they have excessive monthly debt a large mortgage new car payment, high credit card debt, and extra payments on boats or motorcycles are a formula for being broke multiple large debt payments on depreciating assets will quickly drain your cash reserves.

Homes are not assets until you sell them in the meantime they can be large payments with unrealized value be careful how many payments you accept based on your income level payments can keep the middle class in the dark aggressively tackling your debt means reducing your expenses and or or increasing your income once you eliminate your debt you will have more money which you can spend on the things that really matter to you the sooner you start paying off your debts the sooner you'll move from the I'm broke mentality to the I'm rich mentality

you don't invest consistently

first of all, I think it's important for you to understand that saving money will not make you rich to get rich you need to put your money to work which means investing regularly over a long period of time in fact do you know the difference between broke people and rich people broke people pay interest while rich people earn interest so basically if you don't want to be broke you have to do to things stay out of debt and invest that way you won't pay interest and you'll earn interest

You scared

 fear of failure is a big problem too many people get stuck in dismal financial situations because they are afraid to fail they are afraid of effort, sacrifice, commitment, making mistakes or losing their money they are afraid that good financial management will take too much time or be too difficult to learn well if fear is holding you back it's time to realize that you can't succeed if you don't try start by assessing your current financial situation then create a budget and a long-term plan don't let the fear of failure hold you back

you don't plan for your financial future

if you plan for your retirement and have money put into your 401 000 each paycheck you will never be broke as you will always have money in this account investing money in your retirement account or brokerage account will give you a portfolio and a chance to build up capital so your net worth will likely never be zero dollars if you are guilty of any of the above behaviors it's time to make some serious changes so you can start building real wealth you will stop being broke when having money is more important than having fun or buying new things if you take your career seriously make the effort to up your game and manage your personal finances on a budget you have every chance of never being broke.

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