Stop Spending and Start Saving

15 Reasons You’re Broke and How To Change It

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Do you seem never to have any money at the end of the month and always ask yourself, “Why am I broke?” Here are 15 reasons you’re broke and how to change it.

There is a difference between broke and poor. Poor means you don’t make enough to cover all of your necessities. Broke means you can cover the essentials but never have enough money to save or pay down debt. If the latter describes you, here are some reasons why you’re broke. Stop asking yourself, “Why am I broke?” and start fixing the issues before they make you poor.

1. You’re Lazy

I hate having to use cash, but there are a few things that you must have it for. So you have to go to an ATM to get it. The nearest branch of my bank is three looooong cross-town blocks away, which is a lot of blocks when it’s cold and icy or raining.

There is a different bank half a block away. Twice I have been too lazy to walk three blocks in crappy weather, so I used the nearer bank and paid $3 each time to take out my own money.

Being lazy costs money, whether it’s because you don’t want to walk to your bank’s nearest ATM, you don’t feel like cooking, so order out, or don’t like doing laundry, so you send it to the cleaner’s.

How To Fix It

Well, stop being lazy! I know certain things are painful, but they won’t kill you. Being lazy in this way is a destructive mindset, and it will work against you when you’re trying to make sound financial decisions.

Now I take out more money each ATM trip, so I have to go less often. Cash doesn’t burn a hole in my pocket, so having some extra around doesn’t mean I spend it more. I still spend it on only the things I need cash for.

Maybe part of the reason you send out laundry is that you let it pile up, and it seems overwhelming to do it all at once. So don’t let it go for so long. Schedule it like you would, anything that has to get done, and do it!

2. You Don’t Make Enough Money

This one may sound obvious, but what are you doing about it? If you’ve already minimized your living expenses, cut all your frivolous spending, and still can’t make ends meet, then there is only one way to fix that- you need to make more money.

You can keep feeling bad for yourself but unless you’re ready to live off the grid and make your own shampoo then you have to make more money. Sometimes there’s just no way of getting around it.

There’s only so much that you can save. However, there is no limit on how much you make.

How to Fix It

If you work your ass off at your job but feel you’re not being paid what you’re worth, you need to ask your boss for a raise. If that’s not an option, it may be time to make a move to find another job that does pay enough.

Whether you are looking to save for a vacation or retirement, you need to put some extra effort in to make things happen. There are plenty of ways to make extra cash – we have 127 ways right here.

It’s time to hustle. If you have some time, find a way to make extra cash from the couch.

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If you’re tired of watching your paychecks go out as they come in, stop whining and take action. 

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3. Your Socializing Is Expensive

How often do you go out a week? Once or twice with friends, once or twice with a date, once or twice with co-workers? How much is all that costing? Go ahead, check Mint. I’ll wait. It’s a lot, isn’t it?

This is especially true if you live in a big urban area. Food and drinks are expensive in cities. One of the things I’m always amazed by when I leave NYC is how cheap it is to eat and drink out in smaller places.

How To Fix It

Cut back a little. You can decline an invitation once in a while without alienating people. Offer to host a get-together. Have a potluck, or just invite a few people over for pizza and beer. Neither option is free, but both are bound to be cheaper than going out.

Try also not to make every outing revolve around food and drink. Meeting for dinner or at the bar are just kind of default options but spend a few minutes thinking of alternatives.

Meet at a museum, the zoo, or a walk in the park. If you do live in an urban area, search the web for free events in your city. There are pages of results if you do that for NYC.

In October, I’m going to a Renaissance Fair. It’s cheesy but fun, and it only costs $1 to get in.

4. You’re A Brand Slave

There are a few reasons people always buy a name brand or a particular brand of something. It’s familiar, what your parents use; it’s what your friends buy.

Sometimes the brand name is superior to something else but not always, so you shouldn’t make it your automatic default.

why am i broke generic

How To Fix It

Only buy the brand name if there is an appreciable difference. Over the counter, drugs are an excellent place to save by purchasing an off-brand.

Some store brands are markedly cheaper. The name brands are more expensive because of the research and development costs involved in making the product and the advertising money spent to promote them.

Sometimes the store brand is better anyway.

Whole Foods brand of almond butter is cheaper than the name brands and has nothing in it but almonds, while some of the name brands contain weird oils and various types of sugar, they try to hide under one of its 57 different names.

5. You’re Penny Wise And Pound Foolish

Some people will drive to three stores because they can save seven cents on tomatoes at one, thirty-two cents on laundry detergent at another, and a dollar on chicken breasts at the third.

Meanwhile, they’ve spent two hours of time and five dollars in gas to accumulate these few cents in saving. Some people will buy one-ply toilet paper (animals!) but spend $150 a week eating out.

It can be kind of fun to find those savings, but it’s not very fun to give up cable or eat out less, so people don’t go for the bigger wins.

How To Fix It

Look at the bigger picture. You did well to save on your grocery bill, but it doesn’t give you a license to be careless in other areas. Approach spending larger amounts the same way you approach spending small amounts.

6. You’re Pound Wise And Penny Foolish

Okay, it’s better to be this one than #5, but you’re still reading, so you must be broke. This one may be part of the reason.

You live in an affordable home; you have a good deal on your cell phone plan; you drive a used car. Hitting all your targets in the big categories, but still broke!

You leave your affordable home in your affordable car and stop by Dunkin Donuts every morning before work to pick up coffee and a donut.

When you get gas once a week, you also grab a candy bar and a soda. When you go to Target, you are armed with a list.

But you always throw a couple of extra things into your basket.

How To Fix It

You might not even notice you do this because the amounts you’re spending this way are pretty small.

Even if you do notice, you don’t think much of it again, because it’s only a few dollars at a time. But little things add up too.

And they add up faster for broke-ass people of which you are one.

Another reason these small amounts are easy to miss is that often we use cash for them. It hardly seems worth getting out your credit card (which you probably are not paying in full every month) for $2.34 when you have a ten-dollar bill in your wallet.

So if you are tracking spending in Mint or something similar, those cash transactions aren’t showing up.

mint budget

Give yourself a cash allowance for the week that you do track in your budget so you can see where it’s going. Once you know, you can be more mindful of how these small amounts are adding up.

7. You’re Disorganized

It’s getting chillier at night, and it’s time to switch your summer blanket for your winter duvet. It’s around here somewhere! Where is it?

You can’t find it because your house, attic, basement, and garage are crammed with stuff. So off to Target you go to buy a new duvet.

You get an alert from Mint that you’ve been charged a late fee on your cable bill. Didn’t you pay that? You’re sure you did.

How To Fix This

Life is more expensive when you’re disorganized. That duvet is in the house. It’s buried under some camping equipment and clothes that you culled from your closet but never got around to donating.

You have a spot on your kitchen counter where you toss the mail when you come in from work, and the forgotten cable bill is at the bottom of the pile.

why am i broke get organized

Get it together! Clean out one closet or drawer a week until the whole house is done. You’ll be amazed at what you find, what you can get rid of, and how much lighter you feel once all that stuff is gone.

Set up automatic bill pay through your bank. If you don’t feel comfortable with that, at least set up an alert on your phone for a few days before a bill is due.

A lot of billing dates can be changed too. Call up as many as you can and ask that the due dates be adjusted to the same day.

If that will leave you with too little cash, change the dates to two different dates that coincide with when you get paid. There’s no reason you have to be paying bills every few days.

8. You Stick Your Head In The Sand

Are you one of those people who are afraid to take an honest look at all of your expenses? Sure, you know the minimums due on your credit cards and student loans, and you pay them.

But you’re too scared to look at the total balances and compare them to your income. So rather than make any kind of progress on your debts, triage them and do the minimum to keep them out of default.


Tally is your own fee-free, personal debt manager that extends you a line of revolving credit (with a lower interest rate) and helps you pay off debt fast. It scans your linked cards and pays off the one with the highest APR first.

How To Fix It

This is no joke. It’s scary; I know it is. But I promise you will feel better with a clearer picture of your situation. To drift is Hell, to steer, Heaven.

You will feel better because you will be able to make a plan to fix this. And having a plan and taking action on it will give you relief.

Debt Relief For Dummies: How to Easily Pay Off Your Debt

Debt Relief For Dummies: How to Easily Pay Off Your Debt

So open every bill and look at every total. The total is there whether you look at it or not.

9. You Spend What You Expect To Make

Someone related to me who is an idiot with money and in general used to tell me, “I don’t worry about money. They print more every day.”

So he spent like a drunken sailor because he was sure that soon, very soon, he would be earning more of that newly printed money and would be able to pay off the credit card debt he was running up.

But he never really did earn more money. Or the more wasn’t enough to keep up with the credit card debt and thousands more in resulting interest.

How To Fix This

Pretend that tomorrow may never come. Not in the sense that you won’t wake up. That will make you spend more money!

But in the sense that you may not get a big raise at your following review, or your company stock options may never be worth anything or gasp! That you may never actually win the lottery.

Spend based on what you make right now, not what you think you might make one day soon or worse; believe that you rightly deserve.

10. You’re Too Cheap!

Do you always buy the cheapest version of whatever it is you need? Do you sometimes have to buy a second one soon after purchasing the first one because the first one broke? If this is you, you are not saving money by doing this.

How To Fix It

Instead of being cheap, be frugal.

A frugal person doesn’t always choose the cheapest option. When they decide to spend money, they choose the best option they can afford.

If you need a new can opener, you don’t have to buy the diamond-studded one, but you shouldn’t buy the one at the dollar store either because it won’t last.

11. You Drive Everywhere

I was staying with a friend once in Rhode Island, and she wanted me to meet her neighbor. We got in the car and drove to the neighbor’s house. It was on the street directly behind my friend’s house!

She drove to the end of her street, turned, and went half a block to her friend’s house. I was astonished! I could see my friend’s backyard from her neighbor’s front porch.

To this day, it is the laziest thing I have ever seen.

My friend wasn’t a lazy person or unable to walk a short distance, or a long-distance for that matter. I think the suburban car culture was so ingrained in her that it didn’t even occur to her not to drive that half a block.

How To Fix It

I know not everyone has public transit or even sidewalks. But some of you who drive everywhere do. And some of you are capable of riding a bike.

You don’t have to ride or walk everywhere or in terrible weather, but you don’t have to drive everywhere either.

Make a list of all the trips you take in your car for one week. Now look at the list and see if there is even just one trip you could make on public transit or by walking or biking.

Walking and biking are pleasurable. They really are. And if you are one of those people who claim you don’t have time to exercise, doing so can help you kill two birds at once.

12. You Love A Good Sale

Buying stuff on sale is excellent! It saves money and feels like a little victory. Before I go to any store, I go online to see what they have on sale for the week.

But what are you buying? Is it something you need and will use? Or did you see BOGO and go nuts?

why-am-i-broke sale

How To Fix It

If you buy something for $3 that was reduced from $5, how much have you saved, $2? Maybe. Is that thing something you needed? If it was, you did indeed save $2.

If it was something you didn’t need, how much did you save? Nothing, you saved nothing! You spent $3. 

A sale is like the Siren’s Song to some people, and they will buy a thing that’s on sale no matter if they need it or not.

Stop doing this if there is a sale on something you use, by all means, stock up. But ask yourself if you do need it or if you just want that little charge of “saving money” or “getting a good deal.”


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13. You Buy As Needed

I love having lots and lots of toilet roll and paper towels. I have no idea why. I was not deprived of either of these things as a child.

But I love opening my closet and seeing that I have lots of both; it gives me some strange feeling of comfort and security.

Some people only by things as they need them. Out of toilet roll? Now you have to go out and get some, and you buy one roll. Need paper towels? You buy one roll.

Doing this costs more money in the long run. Not to mention, you have to make more trips to the store, and for every additional trip to the store to buy your single roll of paper towels, you pick up a magazine and a soda, and a few other things too.

How To Fix It

Buy in bulk! Poor people often can’t afford to do this. They only have the money to replace things when they run out entirely. But you aren’t poor, you’re just broke.

This is partly why. Buying one of something is usually more expensive than buying several of them.

My local drug store currently has a really cheap, gross, single ply brand of toilet roll on sale for .50 a roll. They have 12 rolls of really nice toilet roll on sale for $4.99.

So the nicer one comes out to .42 per roll. You get a better product at a lower price when you buy in larger quantities.

14. All Or Nothing

If you’ve ever been on a diet, you’ll know this one. You are doing well, and then you fall off the wagon and eat that cheeseburger.

Well, now you’ve done it, gone and blown your diet! So you might as well have a blowout and eat all the things! 

Some people react this way when they get off track with their spending habits too. They mess up and so they give up and now they’re back where they started or maybe even worse off than before they started.

How To Fix It

Perfect is not the enemy of good. You will mess up because we’re humans and not robots. It’s okay to mess up.

What’s not okay is to mess up and then throw your hands up in defeat. You messed up today, but you can, and you will do better tomorrow.

15. You Have No Emergency Fund

You need your car to get to work, yes? But your vehicle needs an expensive repair. No problem, tap into your emergency fund.

That’s why you have one. Oh, you don’t have one. But you still need your car. So you put the repair costs on your already close to the limit credit card.

Or worse, you take out a payday loan. Now you have more debt.

How To Fix It

There are lots of lofty numbers to aspire to when saving for an emergency fund, three months of expenses, six months, $25,000.

However, you’re broke, so those numbers are out of reach right now.

But remember, you are not poor. So you’re going to scrimp, save and cut back until you have $1,000 to set aside as your emergency fund.

That amount is not out of reach for a broke person; you just have to start doing a few of the fixes on this list that you haven’t been doing.

You’ll have your emergency fund in no time, so you can stop using your credit card for emergencies. Remember, debt is an emergency too.

The Importance of Having an Emergency Fund

The Importance of Having an Emergency Fund

Just Pick One!

Do you see yourself in any of these, all of these? That’s okay. That’s why you’re here. So you can stop being broke before you slide into being poor. I don’t want you to be overwhelmed, though.

Just choose one of these you know you’re guilty of and work on fixing it. And then another and then another until you aren’t doing any of them. And you can stop being broke.

Featured Image Photo Credit: “Empty Wallet” by NoHoDamon on Flickr

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Candice Elliott - Senior Editor Candice Elliott is a substantial contributor to Listen Money Matters. She has been a personal finance writer since 2013 and has written extensively on student loan debt, investing, and credit. She has successfully navigated these areas in her own life and knows how to help others do the same. Candice has answered thousands of questions from the LMM community and spent countless hours doing research for hundreds of personal finance articles. She happily calls New Orleans, Louisiana home-the most fun city in the world.
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