No one sets out to be broke. Bad investment, poor money making skill, poor saving habits; these are some reasons you’ll often revert to broke status.
Also, being broke is not having a reliable source of income. Being broke is living paycheck to paycheck with no savings intact. Being broke is being in debt up to your eyeballs.
If you’re sick and tired of being broke, it’s time to take control of your finances! Whether you need to work on your spending habits, learn how to save, or find ways to earn more money, you can find a way to stop being broke.
1. Learn To Live Below Your Means. Spending above what you earn will only leave a trail of debt behind you. If you’re spending beyond your means because you need to keep up with your friends or show others that you can afford a certain lifestyle, you’re not doing yourself any good. Stop worrying about what others can afford and think about how you can live within your means. Put your credit or debit card away. They make it easy to spend money you don’t need to spend.
2. Learn A Skill. You are often broke either because you don’t earn enough or because you spend more than you earn. There are three money skills you need to develop; money making, money keeping and money growing skills. You can’t keep or grow money you don’t have. So the most important thing to do to stop being broke is to develop your money making skills. And what other way than to have skills people are willing to pay for.
3. If You Already Have A Skill, Get Better At It. If you already have a marketable skill and are still broke, it’s either your skill is not good enough for people to pay for it or that your marketing skill needs some work. Take advantage of digital media to reach more prospects. If you are selling a product or service, try online advertising. Learn social media and content marketing. If you’re a writer, start a blog or utilise platforms like Medium, Dev.to. Don’t be skilful alone, adopt the skill of promoting what you do.
4. Use The 50/30/20 Rule. Former American presidential candidate, Elizabeth Warren popularized the so-called ’50/20/30 budget rule’ in her book, All Your Worth: The Ultimate Lifetime Money Plan. The idea behind this rule for budgeting is that 50% of your net income should go toward “needs”, 30% should go toward “wants”, and the remaining 20% should go into savings. “Needs” would include things like groceries, prescription medications, rent, and insurance. Some examples of “wants” are Netflix, cable, and manicures. You may not necessarily hit the exact numbers but work towards splitting your earnings around that percentage. To make this more effective, see dividing up your income as paying yourself first. Set aside at least 20 percent before any other spending. Once you’ve exhausted the rest of your liquid income for the month, let every unimportant thing go or wait till next month.
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