Business/Finance

How to Stop Being Broke (20 Powerful Tips to Help You)

November 7, 2022

It’s not that hard to learn how to stop being broke, if you know what to do and what not to do.

Thankfully reading this article will prove very helpful as it contains very powerful tips that can help you really stop being broke.

First things first…

Being broke is different from being poor. If you are broke it usually means you can cover your expenses but you are not able to save money.

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In other words, being broke means you can cover the essentials but never have enough money to save or pay down debt.

This is different from being poor which means you don’t even make enough to cover all your necessities.

Most people are broke most of the time. They would do all things to get out of this situation.

This article is about how to stop being broke. You can read through it to find out how not to be broke.

Also See: Why Personal Finance Important to Everyone.

Why You May Be Broke

First off, there is a reason for everything. Being broke is an effect of a cause for each person.

The reason why one person is broke may be different from why another person may be broke.

The following is a quick list of the possible reasons why you may be broke:

You don’t have the right money mindset.
You don’t plan your spending.
You spend more than you earn.
You lack self-discipline.
You borrow money for everything.
You procrastinate saving money.
You don’t invest.
You compete with everyone.
You don’t make paying off debt a priority.
You’re scared.
You want to stop being broke so you can make financial progress and change your life.

I know the above might tick you off the wrong way, but remember that this article is not written to blame or offend, but to help.

So, please keep reading to learn what you can do about being broke.

How Not to Be Broke – 20 Powerful Tips That Can Really Help

1. Change Your Mindset

You need to have the proper mindset when it comes to stop being broke.

Be prepared to make radical changes in your finances.

It is possible to stop being broke and so you must have this at the back of your mind.

Start by having an abundance mindset, and make it a point of duty and responsibility to make lifestyle changes that would lead you to have more and stop being broke.

2. Set Good Financial Goal

You need to set good financial goals if you want to stop being broke.

You can set goals to save money or to buy specific items.

Financial goal setting will help you stay motivated. You can set a short-term goal or a long-term goal.

Financial goal setting can help you to stop being broke.

It will help you envision how much you can have or save for a specific period.

Use SMART strategy to set financial goals.

This means your goal setting should be smart, measurable, attainable, realistic, and time-bound.

For instance, you can set a financial goal to save $1,000 in a month.

Or, you can set a goal to spend only $500 in a week.

If you have a clear goal about your finances, then it would be easier to stop being broke. This is because you will have a specific amount saved always.

Also See: Can Money Really Buy Happiness?

3. Create a Financial Plan

It is one thing to set a financial goal, but it is another thing to achieve that goal.

You need a great financial plan to meet the goals you gave set.

A financial plan is the road map to your goal. It answers the questions on “how” to achieve that goal.

You need to take workable steps to achieve that financial goal you have set.

For instance, if your financial goal is to save $10,000 in a year, then you should put a plan to save some money – let’s say $200 – in a week.

Make sure that your plan is workable.

4. Organize your finances

You need to organize your finances if you don’t want to remain broke.

If you have a disorganized spending habit then you may likely become broke.

This is because you don’t prioritize what matters.

Organize your income and expenses so that you can get the opportunity to improve your finances.

Also, you will find it easier to take actions that will help you meet your goal.

5. Don’t Spend Outside Your Budget

You must avoid spending outside of your budget if you want to stop being broke.

If you have set a budget to spend $2000 in the week, don’t deviate from this spending plan.

If you are in the habit of spending more than needed then you will easily become broke.

So, the solution? Don’t spend outside of what you have budgeted for.

how to stop being broke

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6. Increase Your Income

To stop being broke, you need to have more money.

If your earnings are not enough then you should start taking steps to increase your income.

One of the things you can do is to ask for a raise from your employer.

If this is not possible, then you should change to a job where you get paid more.

Or, you can start side hustles to supplement your earnings.

Talking about side hustles for males or females, below are some side hustles that can make you extra money:

7. Live on Less Than You Make

You can stop being broke by living on less than you make.

This is simple logic.

If you earn $500 in a day, then make sure your expenses don’t exceed this amount. You should spend less and have the extra saved.

8. Stop Choosing Convenience Over Savings

It could be convenient to eat out, ride an Uber, or indulge in some habits that would make you spend more money once in a while.

These conveniences may cost you more as they pile up.

Instead of going for these conveniences, you should consider taking steps that would help you save more.

If you stop choosing to go for a convenient lifestyle, you will save more and stop being broke.

9. Stop Using Credit Cards Carelessly

Credit cards usage can increase your debt. If you know how to use this instrument well, then you earn cashback and other rewards.

Indiscriminate use of credit cards to buy items or pay for bills can put you into serious debt.

When this happens, you will remain broke since you end up using your money to settle debts

10. Pay Yourself First

To stop being broke, you need to pay yourself first. This means you save a specific amount from any money you receive as income.

Put in another way, whenever you receive an income, save money from it before making your expenses.

You will build your finances easily and avoid being broke.

You can automate your savings and have a specific amount deposited into your savings account each month.

11. Prepare for Emergencies

You should set aside a specific amount for emergencies. This fund can help you deal with emergencies situations.

Life has a way of throwing spanners in our work.

Events like accidents, unexpected divorce, sudden death, natural disasters, and so on can affect our lives.

Preparing for these unexpected moments would enable us to solve them with ease and help stop money fights in marriages and relationships.

Instead of dipping your hands into your savings, you can access the emergency fund to solve your financial emergencies.

You will not be broke if you have a plan and prepare for financial emergencies this way.

12. Plan for Large Purchases

Before making large purchases that could run into thousands of dollars, you need to make plans ahead.

Since these purchases require huge financial investments, it would not be wise to spend money anyhow.

A good plan is required before making this decision.

Set aside a specific amount each month for the asset.

This will help you save for the item instead of buying it when you are not ready to pay heavy interest.

Also See: What Happens to 401k When You Quit Your Day Job?

13. Create a Debt Payment Plan

One of the signs that you are broke is that you are constantly in debt.

So, you need to get out of debt fast if you want to avoid being broke.

Create a plan to pay off your debt. One of the best ways to pay off your debt fast is to use the Snowball plan.

This strategy allows you to pay off your small debts first.

Or, you can decide to use the debt avalanche method where you pay off the highest debt first.

The lesser debt you have, the more money you have, and the lesser broke you would become.

14. Stop Keeping Up With the Joneses

If you want to stop being broke, then you must stop keeping up with the Joneses.

When it comes to financial matters everyone differs.

Face your reality and avoid copying what others do.

Their sources of income may not be known to you. So, if you join them in spending as they do, you may end up in debt.

Try not to be broke by stop keeping up with what other people are doing.

Other tips on How to Stop Being Broke include:

15. Get Full Price on Items

16. Buy Used Items Instead of New Ones

17. Use Apps to Earn Cash Back or Gift Cards

18. Re-evaluate Your Spending Habits Often

19. Continue Learning About Money

20. Ask for Help From Financial Experts

Conclusion

As this article has revealed, it’s not that hard to learn how to stop being broke, if you know what to do and what not to do.

Thankfully reading this article will prove very helpful as it contains very powerful tips that can help you really stop being broke.

Again, this company has paid $25+ million to members: