8 Things That Keep You Broke
Many people often wonder why they never get anywhere with their financial situation. Even when they make more money, they still seem to be living paycheck to paycheck. Unfortunately, there are a number of traps and bad money habits that can take a toll on your income, regardless of how much you earn.
Here are some examples of things that will keep you broke.
Expensive Homes
We all need a roof over our heads, whether that means renting or buying a house, we need somewhere to call home. When house hunting, it can be easy to get caught up on all the fancy bells and whistles, which is completely fine, if you can afford it. Unfortunately, a lot of people can't. Too many people struggle to pay the rent/mortgages on their homes because they choose a home that they can't afford.
Credit Cards
Credit cards can be a useful tool if used correctly. They can offer cashback and rewards, and if you pay your balance each month, they offer 0% interest.
In theory, credit cards sound great, however, for some people the temptation is too much. Having credit so easily accessible can result in quickly losing control of your money and you can end up taking on too much debt. It then becomes difficult to pay the balance off by the end of each month and it can eventually become unmanageable.
This is not the case for everybody, but it is entirely too common.
No Emergency Fund
An emergency fund is money set aside for any unexpected expenses that might pop up, such as medical bills or sudden unemployment.
Not having a sufficient emergency fund means you may not be prepared to cover urgent expenses which may arise and taking on more debt may be the only option. This will only worsen your overall financial position.
Not Investing
Over time, money loses its value due to inflation. If you're hiding all your money under your bed, then it's not gaining any value.
To keep up with inflation, people invest their money so their money can grow.
Excessive Shopping
We live in a culture focused on consumerism and thanks to technology, it's now easier than ever to buy whatever you want, whenever you want it.
Of course, you can treat yourself as long as you can afford it, but spending too much on materialistic items is all too common and can make it difficult to get on top of your finances.
Not Budgeting
A budget allows you to understand and control where your money goes.
Not having a budget makes it really hard to get ahead of your finances
Lifestyle Creep
Lifestyle creep is the common occurrence of spending more money as you earn more money. It's easy enough to do, afterall, you have no doubt worked hard to earn more money.
However, if you always end up just spending the extra money you make, your financial position will never change.
Expensive Cars
I get it, fancy cars are very appealing. Why just get an average car when you can show up in style? Because cars are expensive, that's why. Obviously, it's important to have a reliable car, but buying a car that is way out of your price range will surely have you struggling to get on top of your finances.
Final Thoughts
If you're already struggling with money then these things are certainly not going to help.
Bad money management and taking on too much debt will only cause more financial stress.
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