5 Very Real Reasons Why You’re Still Broke — and How to Start Fixing Them
I'm sorry to say I've always felt like most of the internet's personal finance advice seems to be lacking in reality.
I love people like Suze Orman and Dave Ramsey, but the idea that cutting Starbucks from my budget is going to magically make me a millionaire is ridiculous.
When I was rolling pennies to pay my rent, you can bet the last thing I was thinking about was Starbucks.
I've since fixed my broken budget and I'm well on my way to saving for a prosperous retirement, but I didn't get there with the normal financial advice out there.
Here are the five weird reasons I was broke and how you can keep from making the same mistakes...
1. Your Money is Too Accessible
There was a time when I sucked at managing money so much, I had to hide my savings from myself. How's that for will power?
And I know I'm not alone here.
I had a decent job, but it seemed like every time I would get a little extra money in my checking account, I'd promptly buy something ridiculous.
"Why, yes I do need to order that ‘Perfect Bacon Bowl’ contraption I saw on last night's infomercial” or "I guess I should go ahead and buy these jeans. The sale ends on Sunday, after all.” Ridiculous.
Aspiration’s Summit Checking Account is an online-only bank account with no fees, no minimum balance, no minimum monthly deposit, and an interest rate that is 100 times what a normal bank will pay you.
Plus, since it’s separated from my main checking account, it makes it just a little bit harder to withdraw it for an impulse purchase.
2. You've Cut Up Your Credit Cards or Frozen Them
Alright, so I've tried the old "freeze your credit card in an ice block" trick. I'll save you some time -- it doesn't work.
At least not for me, I found my money was just too accessible in the freezer.
Before long, I had a hair dryer out and was beating down on that thing with an ice pick so I could make it to Target before they closed.
Sad? Yes, but I've also realized it was kind of stupid in the first place.
You see, my credit card is an awesome source of extra income. I have the Fidelity Cash-Back Card, which gives me unlimited 2% cash back with each purchase. And this isn’t restricted to gas or groceries -- it’s for any purchases I make.
So, by freezing my credit card in an ice block, I was effectively reducing my take-home pay -- and that's just dumb.
You shouldn't use a credit card frivolously, but you should be using it for the purchases you have to make and then you should pay it off at the end of every month.
3. You're Working Too Many Jobs
I know a lot of our readers are working two or three jobs and still aren't able to make ends meet.
You're not alone.
Instead of focusing on how to find yet another job, start thinking about ways to passively boost your income, so you don’t have to work a ton of additional hours.
Obviously, most types of passive income require you to have a huge investment, but there are also little things you can do to make money.
One of my favorites is the ShopTracker app.
If you’re a regular Amazon shopper, you can earn money each month contributing to research to help companies understand what people are buying online. Download and connect this to your Amazon account.
The company will instantly send you a free $3 Visa gift card, plus another $3 for every month you keep it installed.
Another good one is called Paribus -- a tool that gets you money back for your online purchases. It’s free to sign up, and once you do, it scans your email archives for any receipts.
If it discovers you’ve purchased something from Amazon, Target or one of the other 16 retailers listed on their website, it will track the item’s price and issue you a refund anytime there’s a price drop.
You don’t have to do anything!
4. You're Clipping Coupons the Wrong Way
Yes, you should absolutely be clipping coupons to save money on your groceries.
But, if you're clipping coupons out of the newspaper, I guarantee you're doing it wrong.
In the past few years, higher value coupons have moved online. A lot of times you can find the same newspaper coupons for double the value online.
And if you join a site like InboxDollars, it'll pay you extra every time you download and use a coupon. I've actually made an extra $32 this year just downloading my coupons.
5. You're Too Frugal.
When I was at the height of my own personal financial crisis, I seemed to always be thinking about how to save a buck.
I canceled my cable, turned off the air conditioner (in Florida, mind you) and even took extra ketchup packets from McDonalds to keep in the fridge.
Some of it was necessary, but overall it was demoralizing -- I spent all my time thinking about ways to sacrifice and deny myself. And inevitably, I'd end up cracking and splurging $200 on new video games at Best Buy to ease my depression.
I'm not saying there aren't plenty of us who could stand to 'cut' back a bit, but a healthier model would be to spend half of your financial thinking time on ways you can save money and the other half coming up with ways you can earn MORE money.
For some reason, so many people forget to think about the other side of the ledger: You need to make more money if you're ever going to get your budget under control.
If you sign up for both, you should easily make an extra $15-$30/month (most surveys pay between $3-$4 each for 20 minutes of your time). Heck, sometimes I fill them out while I’m watching Netflix.
If you don't like those ideas, take a peek around the site. There are plenty of ideas on how to bring in some extra cash.
Here are some of my favorites:
- How to Make $750/Month Selling Used Books
- Get Paid $50 to Write a Guest Post
- What’s in Your Fridge? Get Paid to Share…
- How to Make an Extra $50/week Working for Amazon.com
- How to Get Paid $200/month Testing Websites
So, there you have it -- some of the crazy things I did to fix my budget.
Your Turn: Do you know how to save money when you're always broke?
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