7 Surefire Ways to Stay Broke in 2018

7 Surefire Ways to Stay Broke in 2018

How to stay broke

Hey everyone! Today I have a great guest post for you from Mike at NinjaBudgeter.com (I love that site name BTW). This is right around the time that our 2017 $$$ resolutions will start to wear off. We’ll be making them again in 2018 before we know it! Enjoy ~M$M

It’s a troubling thought isn’t it?

One full year will pass. Good times, memories, and a lot of hard work, and after all of it, you could still be broke. A full year from now you may still worry about whether you’ve got enough in your bank account to fill up your fuel tank.

It’s still early in the year so if you’re like me, you’re probably still on track with your resolutions. Maybe you’ve been diligently pinching pennies or perhaps you’ve started a side hustle to get some extra cash flowing in.

Soon however, the excitement of new goals will wear off and you’re likely to find yourself reverting back to the same money habits you’ve had your whole life.

Here’s how you can stay broke next year…

I know how it feels to suck at managing money. I struggled to control my finances for the first decade of my adult life. My bad habits always sucked me back in, no matter how hard I tried to spend less and save my hard-earned money..

Changing your money habits as an adult can be incredibly difficult. Sometimes, to understand what we need to do, we first need to get a clear idea of what NOT to do.

So here we are, I’m going to show you exactly what you need to do to ensure sure that you’ll still be broke in 2018.

1. Ignore Your Spending Habits

It’s tough to sit down and do an honest assessment of where you’re at financially. Do you know how much money you actually earn? Do you know how much money you’re spending on eating out every month? What about your cell phone, groceries and heating?

The key to remaining broke is not tracking how much money you’re taking in and how much you’re spending. Ignorance is bliss right?

A better idea: figure out how much you’re actually spending each month on living, transportation, bills and leisure. You can’t get control of your money if you don’t know how much you’re spending.

2. Don’t Keep A Budget

Not keeping a budget is one of the best ways to make sure that you’ll be broke in a year’s time. A budget is the most powerful tool that you have to take control of your money .

You can’t control your money if you don’t know how much of it is coming in, and how much of it is going out.

A better idea: create a budget today. Don’t have the time? Google Sheets has a free budget template that you can start using right now. Just enter your income and expenses and the calculations are done for you automatically. It’s that simple.

Related: Personal Capital vs. Mint Review

3. Pay Everybody Else First

Few people that I know actually do this. Most of us pay everybody else first. The cable company, the car loan company, the grocery store and the gas station get the first cut of their cash. If there’s anything left over, that’s used to save and invest…maybe.

One habit that’s prevalent amongst the wealthy is that they pay themselves first. When the paycheck comes in, they save and invest before paying any bills. This is is a key habit to build if you want to be successful with money.

A better idea: Start a savings or investment account. When you get paid, put 10% in there before you do anything else.

4. Keep Making A Car Payment

If you’re making car payments and would like to remain broke, you’re on the right path. In my opinion, there’s no quicker way to relieve yourself of your hard-earned cash than to pay interest in a rapidly depreciating vehicle.

Having financed three brand new vehicles in my 20s, I’ve learned this lesson the hard way. A car payment will suck up a huge portion of your paycheck and leaves you with less to save and invest.

A better idea: Get out of your car loan asap. Buy a car that you can afford with cash and keep making the car payment to yourself. You can put the money into a short-term investment and within a couple short years, you’ll have enough money to buy the same car and own it outright.

Related: How to De$troy Your Car Payment

5. Don’t Bother Cutting Your Bills Back

Most people could save an easy $100 per month at least just by:

  • Eliminating services that they don’t use
  • Negotiating with cable, cell phone and internet providers or
  • Moving to discount service suppliers

I have personally offloaded over $150 per month by eliminating an unused home phone, moving to a discount internet provider and negotiating a better rate on my cell phone.

The solution: cut bills that you can do without. Make it your mission to lower any that are left. Most of these companies have better plans that you can get access to through their customer retention department.

6. Fail To Plan For The Unexpected

An emergency fund is the difference between a blown transmission or broken refrigerator being a minor nuisance, and a catastrophic event. An emergency fund should be one of the first things you put into place when you want to get your finances in order.

A better idea: save up an emergency fund that is appropriate amount for your lifestyle. $1000 is probably plenty to begin with if you rent or don’t own a car. If you own real-estate and have vehicles you’ll want to have 3-4x that much.

Ideally, you should consider having 3-12 months of savings in an emergency fund. That way you’re protected against broken appliances as well as injuries or job loss for a few months..

7. Buy Groceries At Full Price

Groceries are an easy way to overspend, especially if you’re buying for a family. Hands up if you’ve ever been caught off guard by a $500 trip to Costco!

Finding ways to reduce the amount of money you spend on groceries is not that difficult. Meal-planning, buying in bulk, buying sales, switching to generic brands, couponing, cheap freezer meals etc. There’s lots that you can do to spend less here. Take it from a guy with with 16 one-dollar loaves of bread in his freezer.

A better idea: how you address reducing your grocery budget is going to depend on your situation and how many people you’re buying for. I’m not going into detail here but do some google searching on the subject and you’ll find that there are lots of ways to save.

If you’re early on in your financial journey, some of these things are going to be difficult for you. Keep at it. Get some help from somebody who has been successful managing their money. Seek a financial mentor, do whatever it takes.

These 7 things have made a massive difference in my financial life and the lives of many others that I know. I’m confident that if you implement these habits, you will not be broke by 2018.

Question for you:

What else do people do to stay broke?

 

Live differently. Your bank accounts will thank me later. ~M$M

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22 comments… add one
  • Anonymous Feb 15, 2017, 8:01 am

    The number one thing people do to stay broke, in my opinion, is making poor decisions, both financial and emotional, in early adulthood. I now know the power of those decisions I made at 19 and 25. When I was 19 I was driving around in a car that I purchased for $14k. My annual income was $18k. #stupid. At 25 I was in a bad relationship that lasted a total of 7 years. I should’ve ended it after 6 months, but I allowed inertia and mutual friends to keep me stuck. Had I been with someone better suited for me, I would surely be financially independent already. The issue is that I knew that wasn’t the person for me. We were opposite sides of the spectrum on just about everything, including money. I was a saver and invested and he was not. He impeded a lot of my progress. I just didn’t realize the future effects of my decision to “stay”.

    So that’s my long-winded answer to a quick question 😉

    • Millennial Money Man Feb 15, 2017, 8:21 am

      Yeah it’s definitely hard to overcome those early choices, but very possible! Life is a learning process, no biggie 🙂

    • Ninja Budgeter Feb 15, 2017, 10:09 am

      I feel ya. I have bought not one, but THREE brand new vehicles. All in my 20s. I would probably own a yacht by now if I had chosen to be wise with my money, instead I own a 1991 Geo Metro. I will never go back to having a car payment. Ever.

  • Mrs. Picky Pincher Feb 15, 2017, 8:07 am

    Another great way to stay broke is to put all living expenses on a credit card and NOT pay it off in full each month. We had $14k in credit card debt thanks to that mentality. Ouch!

    But I agree; resolutions are largely promises we break to ourselves. I try to stay away from hard and fast resolutions for that reason. It’s easy to feel like a failure after you set unrealistic expectations for yourself.

    • Millennial Money Man Feb 15, 2017, 8:20 am

      I’m sure that’s stressful – but if I remember correctly you guys are paying off a bunch of debt right now! I didn’t really do any big resolutions this year honestly.

    • Ninja Budgeter Feb 15, 2017, 10:10 am

      I make monthly goals rather than resolutions. Focusing on small wins has helped us come a long way. You’re right that making huge resolutions is just setting yourself up for failure for the most part.

  • Michael @ MurphyOnMoney.com Feb 15, 2017, 8:45 am

    I think one thing people do that keeps them broke is refusing to talk about money. I’ve been part of interactions in which folks are completely unreasonable in their willingness to discuss personal finances. It’s like if they just refuse to talk about it they wont have to own up to their immature and irresponsible spending behavior. Maybe its because they’ve made a mess they think they can’t fix so they just ignore it. I believe the “a better idea” would be opening up to someone who cares about you unconditionally and put the whole thing down on paper and create a game plan to become the hero of the story. — It can be done. I’ve done it, you’ve done it, and so has countless others, but it take intentional action to win with money!

    • Ninja Budgeter Feb 15, 2017, 10:13 am

      Good thoughts there. I think everybody should have a financial mentor. Somebody who has lived a lot more life and has a proven track record of responsible money management. Thanks for the comment!

  • Mrs. COD Feb 15, 2017, 9:25 am

    These are some awesome ways to stay broke, haha! I definitely enjoy not having a car payment; it frees up so much $ every month! And I’d also echo you on groceries. That’s sort of our final frontier in saving money, and it’s almost depressing to think of how much more I used to spend on food before switching to Aldi. Still need to plan better, but we’re getting there! Thanks for the post!

    • Ninja Budgeter Feb 15, 2017, 10:14 am

      Thanks for the comment! I always say that there’s no better way to stay broke than driving a brand new car. I shamelessly drive a 1991 Geo Metro and laugh inside knowing that I’m going to be years ahead of my friends who buy new cars.

  • Jami Taylor Feb 15, 2017, 9:34 am

    I love your site, but I would like to know how you eat healthy and stay within budget. I don’t eat $1 bread because of what’s in it. I eat organic because I believe it’s healthier. I definitely do the sales, but, unfortunately, you can’t get coupons for healthy food. Of course, you can still use them for paper products, which I do. But wondering if you have ideas. I already buy in bulk at Sprouts, Trader Joes, and Farmer’s Market. Thank you and have a great day.

  • Ninja Budgeter Feb 15, 2017, 11:50 am

    Hi Jami,

    Thanks for commenting. As far as produce goes, the cheapest way to get good, organic food where I live is by shopping farmers markets. That may or may not be a viable option. You could also prioritize. Google ‘the dirty dozen’ and there are some articles about which fruits and veggies are best to buy organic and which ones aren’t such a big deal. Depending on whether you have the space you might also consider growing some produce yourself. You can freeze, can, pickle or share the extra.

    Regarding bread, we buy the ancient grain bread at Costco which comes out to about $2.75/loaf. We also own a bread machine and bake our own from time to time. You could invest in a bread machine and make your own for significantly less than that. If that’s not an option, find a friend that makes bread anyways and see if they’d be willing to do a few extra loaves and sell them to you for your freezer.

    Finally, I would challenge your assertion that you can’t get coupons for healthy food. Check with stores, manufacturers and coupon sites. Though you’re unlikely to find coupons for produce, you will find them for dairy and groceries.

  • Stephen Feb 15, 2017, 12:49 pm

    One thing my wife and I both instantly thought about tied to the grocery topic is eating out. Eating out, especially with kids (we have four), is an absolute drain for your hard earned money.

    • Ninja Budgeter Feb 15, 2017, 5:59 pm

      It can be a huge drain. I like to eat out so I budget it I and hit an inexpensive restaurant once per month.

  • Joshua Zirilli, CPA Feb 15, 2017, 1:45 pm

    Not living on a budget is a surefire way to stay broke! I think many people fear the dreaded “B” word because it sounds very restrictive. However, the opposite is actually true. A budget gives you permission to spend. Once I began doing a written budget (before the month begins), I discovered I had a lot of room in my budget and felt like I got an instant raise! Unfortunately, a lot of people live paycheck to paycheck and wind up with too much month at the end of the money. Sticking to a monthly written budget is the fasted way to break that habit.

    • Ninja Budgeter Feb 15, 2017, 5:58 pm

      You’re absolutely right. Budgeting has upended up new opportunities to us that we would never have had otherwise. It’s been the opposite of restrictive for us.

  • Go Finance Yourself! Feb 15, 2017, 10:48 pm

    Some good thoughts here. Paying yourself first is the biggest for me. That’s the first piece of advice I received after graduating college. Always having a car payment is another one. I used to work with a girl who went out and bought a new car right after her 5 year car loan was paid off for the old one. What sense does that make? If you’re hell bent on always having a car payment and trading up every 5 years, then why not just lease? Still a bad choice but a lot better than the one she was making.

  • Ninja Budgeter Feb 16, 2017, 11:06 am

    Thanks for the comment!

    This is something I have in common with M$M. I absolutely hate car payments. Hate them. There’s no faster way to sign up for a mediocre financial life than to buy a car that you can’t afford.

  • Save Splurge Deny Debt - Cameron Feb 16, 2017, 9:56 pm

    Ah the dreaded car payment…..

    I did it too, bought a new car with only about 6 months left before my perfectly good car was about to be paid off…..

    After being hit by someone running from the police (true story, my one civic duty), I won’t have another one. A reliable older model also saves on insurance and is way more practical than a 2 door sportscar.

    The biggest one for me was ignorance to my actual debt. I knew I had student loans but didn’t want to talk about them other than to complain. After having a good support system/wife then putting them down on a budget makes you want to tackle them faster and be smarter with them.

    Great article!

  • AJ Money Matters Feb 22, 2017, 10:34 pm

    As a millennial, I can say FOMO (fear of missing out) will help you stay broke! Not being able to say no can make huge dints in your bank account and once your start saying yes to people, it’s hard to stop. There is sometimes so much social pressure to not miss out on a single thing, because that must mean we’re not living our lives? I think if we determine what actually makes us happy and not conform to FOMO, it will save you some moola in the long run 🙂
    Amanda

    • Millennial Money Man Feb 23, 2017, 7:40 am

      Oh that’s a great one! I agree – social media and being able to see what EVERYONE is doing all the time definitely creates that environment!

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