{"id":108635,"date":"2019-03-18T14:30:32","date_gmt":"2019-03-18T20:30:32","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=108635"},"modified":"2024-02-24T13:08:47","modified_gmt":"2024-02-24T20:08:47","slug":"stop-being-broke-right-now","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/stop-being-broke-right-now","title":{"rendered":"How to Stop Being Broke\u2014Instantly"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">There really isn\u2019t anything profound to say. This is not a complex or difficult problem to solve on paper. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">It&#8217;s simple: you\u2019re broke because of your poor financial decisions. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You need to change your behavior to fix that, which is what makes this situation so difficult.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Like <\/span><i><span style=\"font-weight: 400;\">so many others<\/span><\/i><span style=\"font-weight: 400;\">,<\/span><span style=\"font-weight: 400;\"> I was broke for the majority of my life. Then one day, I decided it just had to stop. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">There wasn&#8217;t a magic fix; I didn&#8217;t win the lottery. I didn\u2019t suddenly receive an inheritance, and I didn\u2019t (and still don\u2019t) have a high-paying job. <\/span><\/p>\n<h2>Where I Began and Where I Went Wrong Financially<\/h2>\n<p><span style=\"font-weight: 400;\">I did, however, have a reasonably lucky beginning to my life. I was born in America, I\u2019m fairly healthy, and I\u2019m 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. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, if you\u2019re in a similar position\u2014you live in America, you\u2019re reasonably intelligent, and you&#8217;re not bedridden\u2014you too can fix your money problems.<\/span><\/p>\n<h2>Money Problems are Fixable<\/h2>\n<p>This is all you have to do:<\/p>\n<ul>\n<li><b>Take your finances seriously<\/b><\/li>\n<li><b>Stop indulging in endless irresponsible consumerism<\/b><\/li>\n<li><b>Stop rationalizing poor decisions <\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">I&#8217;m not trying to make this post all about me, but I\u2019m going to use a bit of my story. Hey, I can relate to anyone who isn&#8217;t doing so well financially. I was once the epitome of bad decisions!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ever avoided checking your bank account because you know it will make you feel guilty? You\u2019re not alone. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">When I finally got sick of being broke, I realized I was hiding from the problem rather than confronting it. I had to change. <\/span><span style=\"font-weight: 400;\">So, I went online and used a net worth calculator to assess the disaster I had gotten myself into. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I found out I was about <\/span><b>$40,000 in the red <\/b><span style=\"font-weight: 400;\">with only $400 in cash. I had a fancy car, nice clothes, and the typical ego of someone who <\/span><i><span style=\"font-weight: 400;\">appears<\/span><\/i><span style=\"font-weight: 400;\"> to be doing well. But like many, I had spent all my resources on appearance and zero on actually acquiring anything of value. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The fact is LOTS of people are living paycheck to paycheck, while their lifestyle screams Instagram famous. <\/span><span style=\"font-weight: 400;\">It&#8217;s not a problem of the few,<\/span><span style=\"font-weight: 400;\"> and part of the problem is exactly that! <\/span><\/p>\n<p><span style=\"font-weight: 400;\">We look around at our peers, thinking they&#8217;re killing it. Then, we try to keep up. All the while, it\u2019s realistically the broke leading the broke.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">My entire career has been spent in auto lending, retail banking, and commercial lending. I\u2019ve 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 <\/span><i><span style=\"font-weight: 400;\">overwhelming <\/span><\/i><span style=\"font-weight: 400;\"><em>majority<\/em> of those who are broke arrived there by their own hand.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-108785\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/count-pennies.jpg\" alt=\"bearded man wearing white shirt hovered over pile of pennies counting them\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/count-pennies.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/count-pennies-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p><em><strong>Related: <\/strong><\/em><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/millionaire-through-real-estate-at-31\/\" target=\"_blank\">How I Went from Broke Poker Player at 25 to Millionaire at 31<\/a><\/em><\/p>\n<h2>Lifestyle Inflation, Rampant Consumerism Are Your Enemies<\/h2>\n<p><span style=\"font-weight: 400;\">Did you know that if you make approximately $30,000 (USD) per year, you\u2019re among the top 1 percent of global earners? <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, to be fair, it&#8217;s kind of a nonsense statistic. It doesn\u2019t 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. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So for those who are broke, it\u2019s most likely that you\u2019re squandering a really good opportunity. The truth is most people in America are far from it\u2014many just think they are entitled to live a life that happens to be beyond their means. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I mean, who would let a little thing like \u201cnot having enough money\u201d prevent them from buying expensive things?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Americans can declare bankruptcy and keep their car and car loan. Is there anything that screams egregious entitlement more than that? <\/span><\/p>\n<h3>You&#8217;re Not Actually Broke, You&#8217;re Spending Money Irresponsibly<\/h3>\n<p><span style=\"font-weight: 400;\">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\u2019t live that life. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Everyone needs to realize material goods don\u2019t produce true happiness. In many cases, material possessions actually create more stress (notoriously referred to as mo\u2019 money, mo\u2019 problems). <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you have all this stuff, you\u2019re far from broke. You just blew all your money on things you don\u2019t really care about and need to correct the way you spend.<\/span><\/p>\n<p>Don&#8217;t feel too bad about it. You&#8217;re not the only one.<\/p>\n<p><span style=\"font-weight: 400;\">My intent here is not to berate anyone in this situation. I just know how rampant this problem is\u2014even though the fix is really simple. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You need to truly understand that <\/span><span style=\"font-weight: 400;\">your lousy financial situation is directly related to your lousy financial choices<\/span><span style=\"font-weight: 400;\">. Once you acknowledge this and are angry enough about the position you&#8217;re in, everything will become clear.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">From here on out, make good <\/span><span style=\"font-weight: 400;\">financial choices, which will directly result in a good financial situation.<\/span><span style=\"font-weight: 400;\"> Easy enough, right?!<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-108784\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/empty-wallet.jpg\" alt=\"woman holding wallet open showing no money\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/empty-wallet.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/empty-wallet-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p><em><strong>Related: <\/strong><\/em><em><a href=\"\/renewsblog\/financial-struggle\" target=\"_blank\">5 Tips for Those Struggling Financially (&amp; Ready for Real Change)<\/a><\/em><\/p>\n<h2>Sacrifice Is Necessary\u2014But Doable<\/h2>\n<p><span style=\"font-weight: 400;\">The thing is, it&#8217;s not easy to stop being broke. However, it <em>is <\/em>100 percent doable. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you want to turn things around, change is necessary. What are you willing to sacrifice in order to fix this problem? <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I find this to be a quite useful exercise in identifying self-created hurdles to success. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">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 <em>actually willing<\/em> to give it up?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">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\u2014I wouldn\u2019t be so worried about being able to pay the bills. <\/span><span style=\"font-weight: 400;\">So, I sold it. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I financed the negative equity on a small personal loan from a bank, and I bought an old, disgusting, <\/span><i><span style=\"font-weight: 400;\">terrible<\/span><\/i><span style=\"font-weight: 400;\"> beater of a car off Craigslist for $1,200. This thing was ROUGH. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I drove it for five years.\u00a0<\/span><span style=\"font-weight: 400;\">Yes, sometimes it broke down, and it was always embarrassing. But saving that money allowed me to <a href=\"https:\/\/www.biggerpockets.com\/blog\/2013\/11\/02\/hack-housing-get-paid-live-free\/\" target=\"_blank\">buy a house hack<\/a> <em>two years later<\/em>! <\/span><\/p>\n<p><span style=\"font-weight: 400;\">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? <\/span><\/p>\n<p><span style=\"font-weight: 400;\">As with most things, sucking it up and reeling in your spending is easier said than done. And that\u2019s why this exercise works so well. Ask yourself, what are your current self-created barriers to reaching your goals? <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Will you cancel cable television, bring your lunch to work,<\/span><span style=\"font-weight: 400;\"> cancel all those little subscription-based expenses that add up, or sell your car and buy a beater?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Be honest about what you&#8217;re willing to give up. What&#8217;s possible for you? A lot of people are simply not willing to drive a dumpy car or buy clothes at Target.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s easy to make excuses why you <em>need<\/em> or <em>deserve<\/em> the lifestyle you have. It&#8217;s precisely the mindset of everyone who gets themselves in this situation. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">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. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You can pick one or the other: sacrifice unnecessary costs and spend those dollars investing in yourself and your business, <\/span><em>or<\/em> <span style=\"font-weight: 400;\">spend all of today\u2019s and tomorrow\u2019s money (debt) on non-essentials that the false god of consumerism has told you will make you happy.<\/span><\/p>\n<h3>No More Blame Game, Take Responsibility<\/h3>\n<p><span style=\"font-weight: 400;\">I know all people\u2019s circumstances are not the same, and I\u2019m well aware the world isn\u2019t a fair place. And to some, I probably sound overly harsh. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">For many though, I\u2019m probably saying what they already know to be true. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unfortunately, no matter what type of situation you&#8217;ve found yourself in, the solution to this problem remains constant: make different choices. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Nobody <\/span><i><span style=\"font-weight: 400;\">deserves<\/span><\/i><span style=\"font-weight: 400;\"> anything in this life\u2014good or bad. So, while it might be someone else&#8217;s fault your economic situation is dire, assigning blame is assuredly not going to help improve your finances. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Taking responsibility and making some sacrifices will be required if you don&#8217;t want to be broke. <\/span><span style=\"font-weight: 400;\">Banking on luck rarely works out. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">As they say, \u201cYou can\u2019t change your life without changing your life.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The good news is that it only <\/span><i><span style=\"font-weight: 400;\">seems <\/span><\/i><span style=\"font-weight: 400;\">monumentally <\/span><span style=\"font-weight: 400;\">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&#8217;ll find yourself on the path toward success. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Also, many people don\u2019t realize that making money is far more satisfying than spending money. I\u2019ve received lots of pushback against that phrase\u2014almost always from someone who has been more of a spender than a maker in life. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, how would they know?<\/span><\/p>\n<h3>Conclusion<\/h3>\n<p><span style=\"font-weight: 400;\">Spend time learning about personal finance. The whole &#8220;being broke&#8221; problem is entirely fixable\u2014and it can be done rather quickly. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Plus, with the FIRE movement (<a href=\"\/renewsblog\/2016\/03\/28\/financial-freedom\/\" target=\"_blank\">financial independence<\/a>, retire early) being so popular at this point, it\u2019s never been easier to find resources to guide you. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Start taking your finances seriously. Stop participating in unnecessary consumerism, and stop justifying poor financial decisions. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The only person who is making you broke is <\/span><span style=\"font-weight: 400;\"><em>you<\/em>. It&#8217;s an observation that <\/span><span style=\"font-weight: 400;\">should be encouraging\u2014because it means <\/span><em><span style=\"font-weight: 400;\">you<\/span><\/em><span style=\"font-weight: 400;\"> can fix it.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-91217\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01.jpg\" alt=\"\" width=\"700\" height=\"85\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01-300x36.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/p>\n<p><em>What are you wasting money on? Have you acknowledged it&#8217;s standing in the way of your success? Are you willing to give it up?\u00a0<\/em><\/p>\n<p><strong>Let&#8217;s discuss in the comments.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>There really isn\u2019t anything profound to say. This is not a complex or difficult problem to solve on paper. It&#8217;s simple: you\u2019re broke because of your poor financial decisions. You need to change your behavior to fix that, which is what makes this situation so difficult\u2014but also entirely possible.\u00a0<\/p>\n","protected":false},"author":14645,"featured_media":108783,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7396],"tags":[],"class_list":["post-108635","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budgeting"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/108635","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/14645"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=108635"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/108635\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/108783"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=108635"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=108635"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=108635"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}