By Bizna Brand Analyst
No one wants to be broke. It’s stressful, uncomfortable, and counterproductive to achieving your financial goals. While there may be some things outside of your control, like whether your boss is willing to give you a raise, there are some things you can control.
You can unknowingly prolong your financial lull by continuing to make bad financial decisions, i.e. spending money when you should instead be cutting back your spending.
You may try to justify certain purchases, rationalizing that you “need” it or that life will be too uncomfortable without it. But, more often than not, you’ll be just fine without those extra purchases. Check out a list of things you shouldn’t do when you’re broke.
1. Loan money to someone else, or cosign for them. Having no money for yourself means you also don’t have money for anyone else. Cosigning is included here because cosigning a loan is essentially accepting the responsibility for the monthly payment if the other signer can’t make it.
2. Rent an expensive house.
Rent will always be your biggest headache when you are broke. You can manage almost everything else that comes with being broke but you cant manage being homeless. Trust me. Keep your living expenses as low as possible. If
3. Ignore your bills and bank statements.
Ignorance is not bliss in this case. While you have your head buried in the sand, a storm is brewing all around you and you can’t ignore it forever. Facing the reality of your situation is the only way to make the most of it and try to get out of it.
4. Pay your bills late.
Late fees add up and eat into the money you do have. If you become too delinquent, some services may be disconnected and you’ll have to pay the full balance due in addition to a reconnection fee. It’s easier, cheaper, and better for your earnings and spendings to just to stay current on the balance
5. Pretend that you have more money than you do.
If people think you have money, they’ll expect you to spend money. You don’t necessarily have to let people know the severity of your financial situation, but don’t pretend you have money to blow when you don’t (even to yourself).
6. Quit your job without having another one lined up.
At least with another job in queue, you won’t have a lapse in pay. Quitting without another job is risky.
7.Spend your spare time doing something unproductive.
There are so many things you could do during your spare time to make more money—directly or indirectly. For example, you could get a part-time job, learn a money-making hobby, or study to improve your skills so you can demand more money.
8. Lie to your spouse about the money.
It’s often said that money is one of the biggest causes of divorce and breakups. Keeping secrets about money will probably cause more harm than good.
9. Spend your savings or emergency fund on things that aren’t emergencies.
If you have savings, make it last as long as possible. Be very conscious about what you’re withdrawing money for. Make sure it’s for necessary expenses and not luxuries.
10. Rule out part-time work. Make some extra money if you can. Consider getting a part-time job in the evenings or weekends. If you manage it well, the extra money can help pull you out of your financial hole.
11. Buy new electronic devices.
You barely have time to break in a device before there’s a newer one, more lightweight and with a better screen.
Resist the temptation to keep up with the latest gadgets. The changes are usually so minor that you really don’t get a significant benefit by switching to a newer version.
12. Gamble. Gambling/betting is never really a good idea – it can drive financially well-off people to the poor house. But when you’re already broke, gambling is a terrible idea, especially if you think gambling is going to change your situation. It’s too risky, the odds are against you, and the cost of losing is too great – no matter what form of gambling you choose.
13. Supporting adult children.
Giving money to your adult children is putting your own financial security at risk, especially if you’re delaying your own bills and savings, or withdrawing from your savings or retirement stash. If they’re adults and capable of working, they should support themselves. There may be the rare exceptions, but supporting adult children should never be the rule.
14. Think your financial situation is going to fix itself.
Your money isn’t going to change itself. You can make the situation better by cutting your expenses and looking for ways to increase your income.
15. Stick to your old spending habits. Your old spending habits helped contribute to your current financial state. You’ll have to change them if you want to improve your finances. Seriously consider how you’ve been spending and make changes so you don’t have to be broke forever.