Personal Finance

How to Stop Being Broke—Instantly

Expertise: Real Estate Deal Analysis & Advice, Real Estate News & Commentary, Real Estate Investing Basics
47 Articles Written
male showing empty pockets implying moneyless

There really isn’t anything profound to say. This is not a complex or difficult problem to solve on paper.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

It’s simple: you’re broke because of your poor financial decisions.

You need to change your behavior to fix that, which is what makes this situation so difficult. 

Like so many others, I was broke for the majority of my life. Then one day, I decided it just had to stop.

There wasn’t a magic fix; I didn’t win the lottery. I didn’t suddenly receive an inheritance, and I didn’t (and still don’t) have a high-paying job.

Where I Began and Where I Went Wrong Financially

I did, however, have a reasonably lucky beginning to my life. I was born in America, I’m fairly healthy, and I’m reasonably intelligent (at least I think so). Yet despite these advantages, I screwed up the first 30 years of my financial life for no reason other than my own arrogance and vanity. Equally as humiliating was how easily I fixed it when I just stopped lying to myself.

So, if you’re in a similar position—you live in America, you’re reasonably intelligent, and you’re not bedridden—you too can fix your money problems.

Money Problems are Fixable

This is all you have to do:

  • Take your finances seriously
  • Stop indulging in endless irresponsible consumerism
  • Stop rationalizing poor decisions

I’m not trying to make this post all about me, but I’m going to use a bit of my story. Hey, I can relate to anyone who isn’t doing so well financially. I was once the epitome of bad decisions!

Ever avoided checking your bank account because you know it will make you feel guilty? You’re not alone.

When I finally got sick of being broke, I realized I was hiding from the problem rather than confronting it. I had to change. So, I went online and used a net worth calculator to assess the disaster I had gotten myself into.

I found out I was about $40,000 in the red with only $400 in cash. I had a fancy car, nice clothes, and the typical ego of someone who appears to be doing well. But like many, I had spent all my resources on appearance and zero on actually acquiring anything of value.

The fact is LOTS of people are living paycheck to paycheck, while their lifestyle screams Instagram famous. It’s not a problem of the few, and part of the problem is exactly that!

We look around at our peers, thinking they’re killing it. Then, we try to keep up. All the while, it’s realistically the broke leading the broke.

My entire career has been spent in auto lending, retail banking, and commercial lending. I’ve been looking at personal financials and credit for well over a decade. I came across so many people with the same story as my own: the overwhelming majority of those who are broke arrived there by their own hand.

bearded man wearing white shirt hovered over pile of pennies counting them

Related: How I Went from Broke Poker Player at 25 to Millionaire at 31

Lifestyle Inflation, Rampant Consumerism Are Your Enemies

Did you know that if you make approximately $30,000 (USD) per year, you’re among the top 1 percent of global earners?

Now, to be fair, it’s kind of a nonsense statistic. It doesn’t take into account cost of living and myriad other factors. But it is a good exercise in understanding how many resources you really have in comparison to the rest of the planet.

So for those who are broke, it’s most likely that you’re squandering a really good opportunity. The truth is most people in America are far from it—many just think they are entitled to live a life that happens to be beyond their means.

I mean, who would let a little thing like “not having enough money” prevent them from buying expensive things?

Americans can declare bankruptcy and keep their car and car loan. Is there anything that screams egregious entitlement more than that?

You’re Not Actually Broke, You’re Spending Money Irresponsibly

We complain about money and the stress of not having enough of it, while holding a car payment, watching our big screen TV, living in a nice house, wearing nice clothes, and grabbing Starbucks on the regular. Let me tell you, truly broke people can’t live that life.

Everyone needs to realize material goods don’t produce true happiness. In many cases, material possessions actually create more stress (notoriously referred to as mo’ money, mo’ problems).

If you have all this stuff, you’re far from broke. You just blew all your money on things you don’t really care about and need to correct the way you spend.

Don’t feel too bad about it. You’re not the only one.

My intent here is not to berate anyone in this situation. I just know how rampant this problem is—even though the fix is really simple.

You need to truly understand that your lousy financial situation is directly related to your lousy financial choices. Once you acknowledge this and are angry enough about the position you’re in, everything will become clear.

From here on out, make good financial choices, which will directly result in a good financial situation. Easy enough, right?!

woman holding wallet open showing no money

Related: 5 Tips for Those Struggling Financially (& Ready for Real Change)

Sacrifice Is Necessary—But Doable

The thing is, it’s not easy to stop being broke. However, it is 100 percent doable.

If you want to turn things around, change is necessary. What are you willing to sacrifice in order to fix this problem?

I find this to be a quite useful exercise in identifying self-created hurdles to success.

When I finally decided to stop living week to week, the first thing I did was reduce overhead. I wrestled with myself about my fancy car. Was I actually willing to give it up? 

If I sold my expensive car, I could save the $500/month payment and $200/month insurance I was spending. Plus, lower overhead would free me from a job I hated—I wouldn’t be so worried about being able to pay the bills. So, I sold it.

I financed the negative equity on a small personal loan from a bank, and I bought an old, disgusting, terrible beater of a car off Craigslist for $1,200. This thing was ROUGH.

I drove it for five years. Yes, sometimes it broke down, and it was always embarrassing. But saving that money allowed me to buy a house hack two years later!

Does anyone reading this thinks less of me because I drove that P.O.S. for so long? Or does the accomplishment of fixing the money problem forever outweigh that short-term embarrassment?

As with most things, sucking it up and reeling in your spending is easier said than done. And that’s why this exercise works so well. Ask yourself, what are your current self-created barriers to reaching your goals?

Will you cancel cable television, bring your lunch to work, cancel all those little subscription-based expenses that add up, or sell your car and buy a beater?

Be honest about what you’re willing to give up. What’s possible for you? A lot of people are simply not willing to drive a dumpy car or buy clothes at Target.

It’s easy to make excuses why you need or deserve the lifestyle you have. It’s precisely the mindset of everyone who gets themselves in this situation.

They rationalize and justify their decisions, but then they live with frustration resulting from a constant lack of resources, lack of freedom, and ongoing financial stress.

You can pick one or the other: sacrifice unnecessary costs and spend those dollars investing in yourself and your business, or spend all of today’s and tomorrow’s money (debt) on non-essentials that the false god of consumerism has told you will make you happy.

No More Blame Game, Take Responsibility

I know all people’s circumstances are not the same, and I’m well aware the world isn’t a fair place. And to some, I probably sound overly harsh.

For many though, I’m probably saying what they already know to be true.

Unfortunately, no matter what type of situation you’ve found yourself in, the solution to this problem remains constant: make different choices.

Nobody deserves anything in this life—good or bad. So, while it might be someone else’s fault your economic situation is dire, assigning blame is assuredly not going to help improve your finances.

Taking responsibility and making some sacrifices will be required if you don’t want to be broke. Banking on luck rarely works out.

As they say, “You can’t change your life without changing your life.”

The good news is that it only seems monumentally hard. Realistically, sacrificing things in order to turn your finances around is only annoying at first. Take it one small step at a time, and before you know it, you’ll find yourself on the path toward success.

Also, many people don’t realize that making money is far more satisfying than spending money. I’ve received lots of pushback against that phrase—almost always from someone who has been more of a spender than a maker in life.

So, how would they know?


Spend time learning about personal finance. The whole “being broke” problem is entirely fixable—and it can be done rather quickly.

Plus, with the FIRE movement (financial independence, retire early) being so popular at this point, it’s never been easier to find resources to guide you.

Start taking your finances seriously. Stop participating in unnecessary consumerism, and stop justifying poor financial decisions.

The only person who is making you broke is you. It’s an observation that should be encouraging—because it means you can fix it.

What are you wasting money on? Have you acknowledged it’s standing in the way of your success? Are you willing to give it up? 

Let’s discuss in the comments.

Alex has spent his career in sales and finance industries and now invests in rental real estate along with working in the underwriting department at a bank in Las Vegas. Alex is an expert in long-d...
Read more
    Kevin Wade New to Real Estate from Rockville, MD
    Replied almost 2 years ago
    Great great article. So true and you hit everything on point!
    Ashley Pimsner Rental Property Investor from Saint Charles, IL
    Replied almost 2 years ago
    Phenomenal article Alexander. It takes real courage to bear your soul to help others! I guarantee that through your dedication and implementation of your new way of living that you will be financial free before you know it. I will share this article with my kids and use you as an example of accountability and action. Well done.
    Alexander Felice Guy with Great Hair from Fayetteville, NC
    Replied almost 2 years ago
    thank you both. I wasn’t sure if this article would be well received, I appreciate your comments
    Michael Johnson Specialist
    Replied almost 2 years ago
    Excellent article. Straight to the point with personal revelations and in-your-face yet polite honesty, haha. Good work.
    Alexander Felice Guy with Great Hair from Fayetteville, NC
    Replied almost 2 years ago
    thank you Michael!
    Amina Sanders from Philadelphia, PA
    Replied almost 2 years ago
    Thanks for the article Alex! It’s so true for so many of us.
    Alexander Felice Guy with Great Hair from Fayetteville, NC
    Replied almost 2 years ago
    glad you enjoyed 😉
    Talisa Rafferty
    Replied almost 2 years ago
    This is great information. It is so common to get wrapped up into wanting what you think you need and feeling like you need to have it immediately. Our current society does not promote delayed gratification and most Americans have skewed expectations. I continue to fall into the consumerism trap so often that I actually have to schedule time in my calendar as “buy nothing” weeks. Thanks for taking the time to write this. I hope it is well received.
    Alexander Felice Guy with Great Hair from Fayetteville, NC
    Replied almost 2 years ago
    “Buy nothing” weeks, that cracks me up. I was so poor when I was younger I used to just leave my debit card at home for days at a time. Had to force myself to not to spend!
    BreAnn Stephenson Insurance Agent from Kansas City, Missouri
    Replied almost 2 years ago
    Thanks for the article Alex! Just the injection of truth and encouragement I needed as my husband and I start working with a financial planner for the first time… I agree with everything you said… one of those things that it’s like yep, I know that, and yep, I needed to hear it again. The truth may hurt at first, but usually the feeling of freedom comes shortly behind. Appreciate the “go get ’em” you offered us today!
    Alexander Felice Guy with Great Hair from Fayetteville, NC
    Replied almost 2 years ago
    Always happy to send some hype to a friend 😉
    Matt Ziegler
    Replied almost 2 years ago
    Great artical Alex – very well written. Thanks for sharing.
    David K. Rental Property Investor from Plainview, NY
    Replied almost 2 years ago
    I think this is a great article. It definitely should be taken seriously by younger people who are starting out and want to build wealth. It is a little harder to do when you are older and have a family and lots of expenses and financial responsibilities. Yes, I wish I knew about these simple tricks when I was young, but I did not. So, naturally, having an expensive house, two children and everything that goes with that, there is not much room to save. I recently lost my job and decided not to go back to the corporate world where I worked all of my adult life. While I am re-inventing my future, I did make small adjustments like downgrading on a car and dropping my luxury gym membership, but that’s just not enough. If anyone has been in similar situation and found the way to save and reinvent their life, please share
    NJ Ram Investor from Morrisville, Pennsylvania
    Replied almost 2 years ago
    Agree w David and the article…but here is the problem no one talks about. If you live like a miser for 25+ years, you will amass a decent fortune…anyone read The Millionaire Next Door? So you have millions but now time and your age has caught up, and … 1) your health may not permit you to eat or drink as you could in your 20s 2) your love life will not be as energetic as it was in your 20s (Viagra or otherwise :-)) 3) after 25+ careful spending years, you may not be happy or comfortable spending but will always look for cheap options 4) you may have lost out taking your family to places that will be in their memories forever 5) and if you lose your job before you get your millions, you will be living like a miser anyways, and finally 5) if, God forbid, you were rich but your health got serious, several hundreds of thousands of your amassed riches are going to go to the healthcare providers, insurance, and pharma companies. So my suggestion is to enjoy some of your money today without going crazy or broke. I was responsible, saving with my first paycheck using a rule of thumb of 15% in retirement savings, 15% post retirement savings, 10% fun stuff (movies, travel etc.), and the remaining going to pay bills. I did acquire two rentals but then as my career and age climbed, I began to splurge a bit more, still keeping to the same guidelines – (bought a 4 yr used Lexus), nice vacations (bought with frequent flyer miles/stays). Then I lost my job, and have not been able to get back to that income even though I have rentals and do some consulting. So I have come to the conclusion that it is best to enjoy every day first, and hope science reverses longevity so none of us has to worry about retirement. After all, will it matter if you had $5 in the bank or $5 million if you cannot recognize the people around you, or need someone to feed and bathe you? Live happy and die happy!
    Anthony Trollope from Pearland, TX
    Replied almost 2 years ago
    I can relate to so much of this! I knew that I wanted to create wealth through RE but hadn’t set a specific enough goal with a plan to attain it. While I was consciously aware of wanting to create that wealth, I was drifting for a long time not scrutinizing my expenses enough, then going through waves of frustration of not making progress. The turning point for me was establishing a set of BIG goals, then getting serious about my accountability plan. Once I had that goal written down, my mentality changed to “how can I get there faster?”, and my actions/expenditures were aligned with that. The income growth piece of this equation is harder. And I’m still working on that. But feeling a lot better about my expenses now that I rationalize them against my goal. Thanks for sharing Alex.
    Christopher Smith Real Estate Agent from Gulfport, MS
    Replied almost 2 years ago
    Awesome article!! Once people own up and take the blame, they then have power to make the change.
    Muslimah Baldwin
    Replied almost 2 years ago
    Great article and very well written. You hit the nail on the head!
    David Pere Rental Property Investor from Oceanside, CA
    Replied almost 2 years ago
    Solid article as always brother! It is a mentality. Income is seldom the problem, expenses are.
    Alexander Felice Guy with Great Hair from Fayetteville, NC
    Replied almost 2 years ago
    Expenses are the first problem to fix Once you know the fundementals then income is certainly much harder to fix. I analyze business tax returns and financials for a living. You’re right in that a lot of ‘successful’ businesses are handicapped by the owners poor expense spending.
    Jerry Maze Wholesaler from Portage, MI
    Replied almost 2 years ago
    I’ve been there too! 2008 straightened me out in a big way! I actually don’t mind living within my means…. it took me two years to feel that way… it was all about finding inner peace and not letting yourself feel compelled to focus on outer appearances that fuels the needless spending!
    Anthony Trollope from Pearland, TX
    Replied almost 2 years ago
    Too true. I heard this quote a few months ago and it resonated with me so much. “Envy is an admission that you know you’re capable of more but you’re not doing it.” Mind blown.
    Anthony Trollope from Pearland, TX
    Replied almost 2 years ago
    Too true. I heard this quote a few months ago and it resonated with me so much. “Envy is an admission that you know you’re capable of more but you’re not doing it.” Mind blown.
    Erik Orozco from Mcallen, Texas
    Replied almost 2 years ago
    Great article Alexander! Being broke doesnt just happen its a choice.
    Bret McKee
    Replied almost 2 years ago
    Fantastic article. “What are you willing to sacrifice in order to fix this problem?”, can be applied to so many different things. Brilliant!
    Mark Reiland from Iowa City, IA
    Replied almost 2 years ago
    Awesome. Great article. On point
    Ken Poore
    Replied almost 2 years ago
    Great article however bad your situation is there has to be at least one thing in your life that you are wasting money on Thanks for sharing
    Ken Poore
    Replied almost 2 years ago
    Great article however bad your situation is there has to be at least one thing in your life that you are wasting money on Thanks for sharing