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How Do You Deal with Being Broke?

How Do You Deal with Being Broke?

Can you be happy while broke? Someone once asked me this question and I considered it an insult. Maybe you are asking yourself that one question like I did – how can you be happy when you always have an empty wallet? You come across something you really need, but know you can’t afford it now, but maybe in the future. How long can it take for that future to come? The only source of happiness is knowing that you can manage the condition you are currently in. Maybe you have been broke for so long that salvaging the situation seems unrealistic.

You may have put into practice various suggestions but still failed. If this is your condition, you can find comfort in knowing that there is something you can do. It is not even that difficult to save yourself from the constant state of being broke for most people. Here are three tips that will help you take control of your finances for good.

Adopt the Right Mindset

In many cases, we find it difficult to get out of financial problems because of our perception. However difficult the situation seems, there is always something we can do within our ability to better things. The first thing you need to do in order to successfully deal with being broke is to adopt the appropriate mindset and the following tips will help you do that:

  • Set targets. If you really want to change your financial condition, you must be certain with what you really want to achieve. Think objectively regarding the financial status you want to attain and what you have to do to get there. Setting goals, both long-range and short-range, will help you remain motivated. Setting a budget will help you in this regard.
  • Do not compare yourself with others. If you are spending too much in an attempt to match your friends, you are causing yourself a lot of harm. Don’t pay unnecessary attention to what friends can afford, and instead, live your life. Do not think your worth depends on the value of the commodities you can purchase.
  • Track your spending. You can’t save yourself from financial crisis if you do not know what consumes your hard-earned money. List all your expenses and try to examine them every month. If you want to spend on luxuries, stop for a moment and think of the time you would have to work in order to pay for them.
  • Plan to settle all your debt. If you have gone broke because of debt repayments, think of the best strategy of paying off your debts faster. Where possible, work overtime to increase your income, but devote the extra earning to debt payment. If you finish paying earlier, you will save yourself from more interest payments.
  • Create some savings. I know this may seem ridiculous when you are broke. But trust me, if you are able to put together a nest egg–even a small one–you won’t be forced to go into more debt when an unexpected expense comes up.

Your perception is very important when it comes to saving yourself from the financial crisis. Try your best to remain positive as you work to better your financial situation.

Protect Yourself from Money Traps

You are already in a mess, so there are some things you really need to avoid. If you are not careful, you may worsen your situation further. Right now, you should focus on improving your situation. So, avoid the following things:

  • Try not to lend. Generally speaking, you should aim to help others, because your time will also come, and when it does, you will also need others to be there for you. But why should you lend to others when you cannot afford to even pay your bills? Be pragmatic about your situation and help others in ways that don’t involve giving or lending them money.
  • Do not go for expensive payday loans. Being broke, chances are you are living paycheck to paycheck. You may be tempted to try out payday loans. These loans have very high-interest rates and will only worsen your condition.
  • Compute the cost of loans before applying. We often apply for loans without knowing how much they actually cost and this can be a disastrous mistake. If you must take a loan, calculate how much it will cost and see if you can afford to repay it in a timely manner. If you anticipate you cannot afford it, don’t apply. Try other alternatives. Always check online loans like A1 Credit details before applying for other types of loans.
  • Shun impulse buying. Always have a solid plan for what you need to buy and stick to it. Avoid friends who spend their money aimlessly, as they can be a bad influence.
  • Make wise use of credit cards. Remember, any time you are using credit cards, you are only postponing payment at a cost. If you can afford to make a cash payment, do that. Use a credit card only when it is absolutely necessary.

Spend Less

You are in a financial crisis and you can’t afford to overspend. Use the following tips to spend less:

  • Always track your spending and avoid non-essential spending.
  • Buy second-hand products. Do not compare yourself with friends who can afford brand new products. You will save a lot if you go for second-hand products.
  • Try to cut your monthly costs. Before making a purchase, always consider less expensive alternatives.
  • Compare items before making a buy decision to get the best value for your money.
  • Always negotiate for better terms.

Look for More Earnings

Have you put the above-mentioned tips into practice? They will allow you to save money. But another tactic is to earn more. Here are some ways to do that:

  • Work overtime if your company allows it.
  • Look for a better job or seek a promotion in your current company.
  • Look for a side-hustle. If you have other skills, convert them into money-earning activities. You can be a freelancer or offer consulting services in your areas of expertise or talent.
  • Sell the products you do not use.

It is difficult to live while broke. It is time to start getting out of the financial mess you are currently in. You can successfully deal with being broke if you use the suggestions we have discussed in this article. Take one step at a time and be patient with yourself. We wish you the best.

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by Brian Perry // Brian Perry is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.