You thought with this new job that you’d never have to worry about money again. It turns out that you were wrong. The truth is that even people who make six-figure incomes can be broke.
How is that possible? Let’s look at why you’re always broke – even with a high salary.
You Have No Idea Where Your Money Goes
If someone were to ask you what you spent your income on last month, would you have an answer? Many people have no idea where their money goes each month. All they know is their bills are paid and they’re broke.
Take the time to start tracking your expenses. Write down every little thing so that you know where your money goes each month. This can help you see the changes you need to make to be financially responsible.
You Don’t Have a Budget
How much do you spend on groceries each week? What about entertainment? If your answer is, “I don’t know.” this is one of the reasons you’re broke.
Even if you’re making really good money, you need a budget. Look at your tracked expenses and see how much you’re spending in different areas. Is it way too much? Then scale back. For example, try to spend 25% less on eating out each week.
You’re Living Above Your Means
A huge promotion often encourages people to rush out and buy a new house or a new car, maybe even both. This is a huge mistake.
You’ll soon find yourself overwhelmed with payments you can’t afford. If your new mortgage or car payment is suffocating you, consider getting rid of the new car and buying something much cheaper and downsizing to another home.
You’re Still Charging
If you’re making such good money, why are you using credit cards? In most cases, it boils down to not being financially educated. Sure, you may be able to save 10% by using a company’s credit card, but the interest rate may be 18% or higher.
If you’re not paying off your bill each month, you’re not saving a dime. Stop using credit and start saving for the things you want and paying cash.
You’re Only Paying Minimum Payments
Last, but not least, you’ve run up high balances on credit cards and you’re only paying the minimum payment. This needs to stop. You need to pay as much as you can and get the balances paid off. Once your debt is paid off, you’ll have a lot more money in your bank account each month.
It doesn’t matter how much money you make. If you’re not being financially responsible, you’re going to be broke.
Nora from FL
I had a boyfriend making 125 k yearly who never had money. He borrowed money and never repaid it. He didn’t drink or do drugs. My guess was an escort habit.