In the words of money guru Dave Ramsey, “Normal is broke. If you don’t want to be broke, you’ve got to do some weird stuff.” Even if you make a lot of money, you could still be cash poor. Most Americans do not have more than $1,000 saved in case of emergency, and far too many people are just one missed paycheck away from bankruptcy.
So, how can we fix that? If you are broke all the time, you’re probably wondering how other people manage to have money left over each month, even when they earn as much as you do. Here are 30 ideas to help you stop being broke for good.
30. Do The Math
One of the biggest mistakes people make with their money is that they think about their budget in their head without actually writing it down. This happens a lot when people get a promotion at work, and they start to make more money. Instead of assuming that you can afford a new monthly payment on something, write down an actual budget on a piece of paper or in a Word document. Remember to give yourself some savings. Once you see all of your monthly expenses, you might realize that you do not have as much as you thought.
To some of you, this might sound like common sense. However, most people who end up in bankruptcy are there because they never stopped to plan a budget. If you continue to live your life spending money in the moment, you’ll end up broke in the end.
29. Plan Your Career Path
Paying for things can be stressful, especially if your job does not pay very much. Even if you take our advice and write down a budget, you might be afraid you can never buy the things you want. Instead of focusing too much on the issues at hand, look at the big picture. What is your career path? Do you plan to stay at your current job for the rest of your life, or are you expecting to move on to something that will make more money in the future?
The biggest difference between people who succeed and those who don’t is that the former are willing to make a plan about their career path. They know where their career is going, and they have a good idea of how long it will take to get there. For example, if you know that a few years from now your investments will begin to pay off, you might feel more comfortable waiting to buy a house. However, if you are going to stay in the same low-paying job for the rest of your life, you might feel as though it is now or never.
28. Don’t Buy Things Impulsively
One of the quickest ways to lose your money is making impulse purchases. This happens a lot if you spend time with your friends. While you’re having fun, it’s easy to indulge in the moment. However, this is usually what leads to people checking their account and seeing that there is suddenly only $5 left.
Instead of buying things impulsively, try to stay very present in every moment. Really think about every dollar that are spending. Try to add up your purchases throughout the day in your head before you make the decision to buy something else. If you want something on Amazon, put it on your wishlist first. Once it has sat on a wish list for a week or more, you may realize you no longer want that item. But if you truly do still want the thing on your list, go ahead and buy it. At least you know that you took your time to seriously consider whether you wanted it or not.
27. Prepare For Exhaustion
One of the biggest excuses we make spending money is that we are too tired to make the right decisions. Instead of cooking at home, a lot of people want to go to a restaurant. Americans are extremely hard workers. We believe that if we work hard enough, we can achieve our dreams. In a lot of ways, this is a beautiful mindset, especially compared to other countries who are more pessimistic. However, the price we pay for working hard and barely having any time to ourselves means we are exhausted.
Our exhaustion leads us to throw money at problems. Try to take notice all the times you spend money simply because you’re too tired to do something yourself. Once you realize this, it can be very eye-opening. It would be best if you could arrange your schedule to do things to help save money when you have a lot of energy. For example, if you know you eat out too much, start cooking and meal prepping on Sundays. Most people have Sunday off of work and slept in late. You should have plenty of energy to cook and make good decisions that your future self will thank you for.
26. Don’t Shop As Entertainment
Depending on where you live, shopping might be the only form of entertainment you have. This is especially true in rural areas, where Walmart might very literally be the only place you can go after 9 pm. However, shopping for entertainment always leads to spending. Even if it’s a small purchase here and there, those spontaneous trips to the store add up. If you find yourself shopping simply because you’re bored, you should probably get a different hobby.
There are so many different, free, and cheap hobbies you can get into. Hiking can help you connect with nature, it is completely free. Or, you could make a one-time purchase of something like a guitar and spend endless hours teaching yourself how to play. Try to fill your time with things that you are passionate about instead of shopping. Start to follow the dreams of all of the things you’ve ever wanted to try, you will find that you are a much happier person.
25. “Death by a Thousand Cuts”
Most people make the mistake of convincing themselves that a small purchase on a credit card does not matter in the grand scheme of things. Dave Ramsey says it best; “People don’t get into $10,000 of credit card debt with one purchase. They do it with 2,000 $50 purchases. It’s death by a thousand cuts.”
Remember, every little purchase will add up over time. If you can’t stop yourself from spending, you should consider cutting up your credit cards. Once the card is cut, you can make monthly payments without making the problem worse.
24. Start Investing
One of the best ways to stop being broke is to invest. Once you start investing, you start to see money very differently. If you know that your $100 could turn into $200 if you invested it, maybe you would stop yourself from using that money to buy things you don’t actually need.
Most people try to invest in their retirement. If you begin investing in a ROTH IRA in your twenties, you can retire a millionaire in your sixties. This is because of the magic of compound interest. If this is new to you, check out the ROTH IRA calculator at Bankrate to see how much you would need to save at any age in order to prepare for retirement.
23. Start Carrying Cash
Debit cards are amazingly convenient, but they come with a dangerous double-edged sword. When you are swiping a card, it’s far too easy to pay for things. A lot of people make the mistake of not checking their banking apps throughout the day to make sure they still have enough money left in the bank. Before they know it, they have accidentally spent all of their money until there is nothing left. If this sounds like you, you should probably get in the habit of carrying cash.
When you carry cash, you can give yourself a daily budget that is much easier to stick to. For example, if you only want to spend $20 per day on miscellaneous purchases, keep an envelope of cash in your sock drawer, and limit yourself to only grabbing a $20 bill. If you spend less than $20 one day, the extra cash could roll into the next. It becomes almost like a game to see if you can stay within your budget.
22. Save For Things You Want
These days people expect instant gratification more than ever before. Amazon Prime has everyone expecting their packages to arrive within two days instead of two weeks. This lifestyle has people making decisions of instant gratification pretty much everywhere else. When someone wants something, they want it immediately. A lot of people don’t even take the time to ask themselves if they truly want it. They will charge the purchase to a credit card, and get in a tremendous amount of debt.
If you don’t want to be broke, remind yourself that there is a huge difference between want and need. Credit cards should be used in case of an emergency. The next time you desperately want something, start saving for it instead of putting it on a credit card. As time goes on, you may realize that you don’t actually want it as much as you thought you did. Or, when you do actually buy it, the satisfaction you feel is so much greater than charging it on a card.
21. Stop Loaning Money to Friends
Friendships are an extremely important part of life. However, we all know at least one person who takes advantage of their friends by borrowing money. Some people even forget that they borrowed money from you. Not only is this obnoxious, but it’s also keeping you broke. And if you hold resentment against your friend for constantly borrowing money, it might eventually escalate into an argument over it.
Next time someone asks you to borrow money, say that you’re sorry, but you don’t have any money left to loan out. Even if you do have money in your bank account, you shouldn’t feel guilt-tripped into giving it away to someone else. You worked hard for your money, and you can decide what to do with it. It’s still possible for you to help people without giving money away.
20. Live in a Smaller Space
Most reputable apartment agencies will only allow you to move into a place if you make three times the monthly rent. This means that you would be spending 33% of your income on rent. However, if you rent an apartment from an independent landlord, they do not always care if you make less than 33% of the rent. Even so, that is a huge chunk of your paycheck that you are giving away. Instead of giving away 33% of your income, consider renting a smaller space or getting a cheaper mortgage.
When you live below your means, you’ll have extra money left over to spend on other things. For example, a rental agent might tell you that you qualify for a two-bedroom apartment that is $1,500 a month. However, they have one-bedroom apartments available for $1,000. If you are always broke, you should probably go with the one-bedroom apartment instead. That extra $500 a month can go towards your debt or be put into a Roth IRA for your future.
19. Talk to Your Partner
For some reason, there are people out there who are afraid to talk about money with their partners. They might be embarrassed by their amount of debt or how little they make. Or, they feel like they do not want money to come between the relationship. However, no matter how much we want to pretend that it’s not a factor, money is extremely important in a relationship. It is especially important if you are thinking about getting married. Money is one of the top things people argue about and one of the leading causes of divorce.
Unfortunately, a lot of people are in a relationship where money is very one-sided. One partner may be paying for everything, and the other fully depends on the person who is working full-time. This can potentially lead to financial abuse from either party.
18. Don’t Overdraft Your Bank Accounts
One of the worst things you can do is overdraft on your bank account. You would be shocked to know just how many millions of Americans go in the negative with their checking account every single week. In 2018 alone, Americans paid a monstrous $34 billion in overdraft charges. People are very literally giving their money away from sheer carelessness. Banks employ teams of customer service representatives to handle all of the calls from angry customers who see that they were charged $35 for an overdraft. Banks profit from human error, but you don’t have to be a victim.
Going in the negative also forces you to borrow money from a credit card. It can become a vicious cycle of debt that’s very difficult to get out of. The only way to prevent yourself from going in the negative is to track your spending. All it takes is sitting down for a few minutes with a calculator to figure out what will be withdrawn each month, and how much you have left to spend.
17. Pay Your Bills On Time
Being late with your bills can quickly ruin your financial reputation. It will show as a negative mark on your credit score, and this can prevent you from borrowing money to buy a house someday. Just like overdraft fees with the bank, most credit card companies will charge you a late fee if you do not pay your bill on time. This is also very literally like giving your money away to make banks richer.
If you struggle with paying your bills on time because you are forgetful, set up alerts on your phone to remind you. Sometimes, the reason why are you are forgetting to pay a bill is because you simply have too many obligations to keep track of. If at all possible, try to pay off some of your credit cards in full, or find a consolidation loan so that you can get your bills compiled into one easy payment.
16. Group Your Errands Together
According to US News, Americans spend an average of $386.09 per month on gasoline. For people with long commutes and gas-guzzling vehicles, it could be even more. Not everyone can afford to switch over to a hybrid vehicle. But the one thing you do have control over is how frequently you drive your car.
Instead of making multiple trips back and forth to a neighboring town to do your errands, try to group everything into one day. Think ahead for what you need that week. You could also start carpooling to work or catch a ride with your friends when they go shopping. Depending on how much gas you were wasting with frivolous trips, you could save over $100 a month in gas.
15. More DIY Beauty Treatments
If you are in the habit of going to get your nails and hair done on a regular basis, it can quickly add up. If this sounds like you, quickly go through your transactions at the salon and see how much it adds up to. Ask yourself if it was truly necessary for you to get these things done so frequently. For example, embracing your natural hair color means that you do not have to constantly keep up with dying it. And allowing your real nails to grow back healthy and strong means that you’ll no longer have to cover them with fake gel or acrylics. It’s possible to embrace your natural beauty without breaking the bank.
And if you insist on continuing with your routine, there are plenty of tutorials on YouTube that will teach you how to do everything at home with products bought from professional retailers like Sally’s Beauty.
14. Keep Your Current Phone
Mobile companies like Sprint and AT&T profit off people who are willing to get a phone plan. Instead of owning a phone outright, people spend upwards of $100 a month to essentially lease their phone and have a service plan. When a new phone comes out, they decide to trade in their old model to get a new one, which perpetually keeps them in the same situation of paying $100 per month for their services. The need for a new phone is keeping a lot of people broke.
If you were to just save a few hundred dollars, you could buy a phone outright that you will own or a few years. There are also other service plans like TracFone that will allow you to put a SIM card into an unlocked phone. Those plans cost just $20 per month. Think about everything you could do with an additional $80 per month, and you may not feel as broke as you once were.
13. Quit Smoking and Drinking
In the United States, a pack of cigarettes is anywhere from $7 to $10. And if you have a habit of drinking alcohol, a bottle of hard liquor is anywhere between $10 to $40, while a six-pack of beer is around $10. Depending on how much you smoke or drink, you very well might be spending more than $100 per week on your bad habits. With all of the scientific studies out there that have proven how bad this is for you health, you don’t need another lecture. Just ask yourself this one question; how are smoking and drinking helping improve your life? If you are being honest with yourself, they are only hurting you.
If you want to quit and have failed in the past, we recommend reading Allen Carr’s Easy Way to Quit Smoking Without Willpower. He has also written books about quitting drinking, losing weight, and more. This will help you to realize just how silly it is to keep up with these bad habits. Once you quit overeating, smoking, or drinking, you will be shocked to see just how much money you have left over at the end of the week.
12. Change Your Expensive Hobbies
Everyone should enjoy doing the things they feel passionate about. Sometimes, their hobby is the one thing that brings them a lot of joy in life outside of a job they hate. We encourage you to keep following your bliss, no matter what it may be. However, certain hobbies cost a lot more than others. If you feel like you are always broke, it could possibly be because you are spending too much on extracurricular activities.
Everyone’s hobbies are different, so we can’t give advice for every situation. But some people manage to sell their unused hobby items on eBay and use what they earn from the sale to pay for the things they want. This works well if your hobby involves collecting limited edition items. If your hobby involves paying for an expensive membership to a gym, that can be a bit trickier. Most luxury gyms allow you to pause your membership for up to 3 months. You may want to pause your membership and start doing outdoor activities instead until you can get your financial situation in a better place to go back to the gym.
11. Visit Your Local Library
Some people out there spend a lot of money buying new books and movies. While these are an amazing way to spend your time, it can be very expensive. There’s actually no need to spend money on books or movies ever again so long as you visit a library. Every county in America has at least one public library available to everyone. As long as you have a library card, you can borrow DVDs, Blu-rays, books, and CDs. They have computers and free Internet available to anyone who needs to use technology, and some libraries have even set up a 3D printing lab.
If you like ebooks and audiobooks, you can even access free digital content with your library card. Instead of buying a new book or movie when it comes out, you can get everything for free just by visiting your library or the website. Over the course of a year, you should be able to save hundreds, if not thousands, of dollars on your content.
10. Connect With Your Inner Child
Remember being a kid, and how a $5 bill felt like a small fortune? We were so excited to spend our money, and we thought long and hard about how many things we could get in the store before we committed to a purchase. It was almost like a game to see how much we could get with such a small amount of money, and it felt gratifying.
As adults, that same $5 seems almost meaningless. We spend it on a cup of coffee at Starbucks, and it may even be what you pay for your commute to work. It is possible to go back to the feeling you had as a child. Try to remind yourself how long it took for you to earn that $5. Once you begin to appreciate money again, you’ll spend less and feel less broke.
9. Shop Your Own Closet
When people run out of spending money, the culprit might be clothing. According to SmartAsset, the average American buys 60 new pieces of clothing and 7 pairs of shoes every year. That’s much more than people actually need. And if you do feel as though you actually need these new clothes, it may be that you are buying poor quality “fast fashion” pieces that fall apart in just a few months. Instead of wasting money on cheap clothes, buy high-quality pieces that will last for years.
In the Netflix series Tidying Up With Marie Kondo, she has every single person make a pile of their clothes on their bed. Once you see how many items you truly own, it becomes clear that the statement “I have nothing to wear” is an outright lie. Most people have clothes that they have forgotten about and would be willing to wear if they just shopped in their own closet.
8. Cut Back on Gift-Giving
The average American spends over $1,000 on the holiday season. And many of them put that money on credit cards. Unfortunately, statistics have shown that a lot of people are still carrying debt from last year’s Christmas, so the debt continues to pile on year after year. Giving gifts to family and friends can be more gratifying than receiving. However, if it is getting you into debt, you need to stop this cycle. Remember that most people care more about spending time with you and building memories around a holiday. Can you even remember what your friends gave you every year? It is more likely that you remember the parties and the things that you did together on the day rather than presents.
If you have a large family, you may want to switch over to having a Secret Santa. This can be a lot of fun, and it will save everyone hundreds of dollars compared to buying a gift for every person in the family. For your friends, you could decide to do a group gift, or make them something that is handmade.
7. Cancel (Or Pause) Your Streaming Accounts
A few years ago, canceling your cable subscription and switching over to Netflix was guaranteed to save you a lot of money each month. People were proud to call themselves “cord-cutters” and all was right with the world. However, today there are so many more streaming services out there. There is Hulu, Amazon Prime video, Disney+, HBO Go, Apple TV, and much more. All of these streaming services have series and movies available that the other doesn’t. So it makes sense why you may have signed up for more than one. But, if you work full-time, the chances are that you don’t actually have the time to use every single one of these apps each month.
Most of these services allow you to pause your membership so that you do not pay for it in a month you are not actually using it. They will still save your shows so that they are ready when you come back. If at all possible, you could wait until a new season of your favorite series comes on Netflix, binge watch it in less than a month and then pause the membership again. Remember that there are also free shows and movies on YouTube, so if you have not already done so, download the app on your smart TV so that you can have free content all the time.
6. Clean Your Own Car and House
Earlier in this list, we mentioned that you should stop spending money because of exhaustion. One of the biggest things tired people choose to pass off to someone else is cleaning. They may spend a few hundred dollars a month hiring a maid, or $15 every time they go through a professional car wash. If you chose to do those jobs yourself, it could be totally free to clean your own house, and only $3 to $5 by going to a car wash where you do the work yourself.
Cleaning seems like a huge chore, but it can actually be enjoyable to disconnect from a screen and focus on working with your hands. You can even listen to a podcast or an audiobook to help pass the time while you vacuum, dust, and do laundry.
5. Find a Side-Hustle
In the years following the 2008 recession, fewer people are able to live a comfortable lifestyle working just one job. Families are also more likely to have two working parents, and nearly everyone has a side-hustle. If you don’t already, you may want to consider getting one too.
A side-hustle could be anything you like. Maybe you could start an eBay or Etsy business. If you have a car, you could start driving for Uber. Or, if you aren’t the entrepreneurial type, you could get a part-time job working 20 hours a week at a coffee shop. The possibilities are endless, and you just have to see what’s out there.
4. Use Coupons
Plenty of broke people do not want to use coupons, because they are afraid that it will reveal to the world that they don’t have a lot of money. The truth is actually the opposite. Most people who use coupons are actually great with their money and earn a healthy salary. The reason why they use coupons in the first place is because they appreciate the value of a dollar and make the most out of their money.
If you are new to couponing, check out TheKrazyCouponLady, where they have beginner’s guides as well as posts on the best deals of the week. They focus on sales from some of the major retail chains like Rite Aid, CVS, Target, Walmart, Kohl’s, and more. Once you get good at couponing, you can even start getting things for free.
3. Appreciate What You Have
Everyone has a different definition of “broke.” Even if you feel broke, you might be “rich” compared to someone else in a worse situation. So if you feel like you are broke all the time, it might be as easy as changing your mindset. Instead of focusing on the things you don’t have, try to be grateful for the things you do have. Make a gratitude list starting with sentences that say “I am grateful for…” Anyone can feel rich if they have the right mindset.
There is a saying that “comparison is the thief of joy,” and that’s true. If you constantly compare yourself to people you see on Instagram, you might feel like you are completely broke since you can’t go out and buy as many things as your friends. Instead of comparing yourself to others, measure your success by how much you have grown as an individual. Do you have more money today than you did a year ago? What about five years ago? Would your past self be proud of you today?
2. Search For Secondhand Items
If you don’t already go to thrift stores, you may want to start. Being broke can actually feel sort of fun if you find treasures hiding among the junk in a charity shop. Many items are available for a fraction of what you would pay when it was brand new. Your friends will have no idea if you bought those items secondhand, so it really doesn’t matter. By being frugal, you can have more of what you want from life.
In the age of the Internet, you can find almost anything you can imagine secondhand. You could search on eBay, Craigslist, and Facebook Marketplace. In a lot of cases, you might even find an item in like-new condition, and people are selling their items because they simply did not get around to using it. If you can go to a thrift store in a wealthy neighborhood, you are more likely to find high-quality items in amazing condition.
1. Find a Higher-Paying Job
Last and certainly not least, if you are broke, you simply need a higher-paying job. Sometimes, even a side-hustle is not going to get you out of a bad financial situation. Of course, getting a new full-time job is easier said than done. You may have to update your resume, take classes, and go on multiple interviews before you find something better. Don’t be afraid of failure. If you don’t try at all, you have a 100% chance of failing. But by at least trying, you are giving yourself the chance to make a better life for yourself.
You don’t have to be broke forever. We believe in you! By taking these steps seriously, you will find that your life will begin to drastically change for the better.