How To Go Broke - 5 Easy Steps

July 30, 2020

We spend a lot of time in these articles discussing the best investments of your time and money, but what about the don’ts?  If you recognize yourself in any of these bad habits below (which let’s face it, we all do) make a note to be more aware. Sometimes a little self-awareness is all you need to change and start creating better financial habits.

Trying to keep up with the Joneses AKA Conspicuous Consumption

Most of us have heard this expression and many of us are guilty of it too.  It is the spending of money on luxury goods and services to display economic power. In layman’s terms, we want to fit in with our peers and will use status symbols to do so. The problem with this is that many of us lack the actual resources to do this. It can be so tempting to upgrade to the latest car or iPhone model, but financial decisions like these should be based on your actual resources and not what is parked in your neighbor’s driveway.

Traveling

It’s summertime and with summertime comes waves of beach and lake pictures in our social media news feeds. Everyone is smiling, looking rested, and suddenly we find ourselves on VRBO or Airbnb booking a rental for the week. Remember to hit the pause and think about all the expenses that go with traveling. Nightly stay rates, food, supplies, gas/airfare, attractions, and more are all vacation costs that add up quickly. If you know that a vacation probably won’t fit in the budget this year, consider a staycation like grilling out at the house and renting an inflatable slide for the kiddos.

Putting everything on credit

Or to be more specific, not paying off your monthly credit card balance(s) in full. If you are making the minimum payment on credit cards every month you could be paying thousands of dollars in interest. An old saying goes, “Broke people ask, ‘How much per month?’ and rich people ask, ‘How much?’” Start considering the full cost when making purchases. Instead of buying now, paying later, work on saving now and buying later.

Presents to Family

If your “Love Language” is gift-giving, then you are guilty of this. Father’s Day, Mother’s Day, Birthdays, Valentine’s Day, Christmas, thank you gifts, get well gifts, and the list goes on and on. With so many occasions and family members to purchase gifts for, it can quickly get out of hand. According to a recent Gallup study, American adults spent approximately $942.00 on gifts for Christmas alone. Consider giving more DIY gifts, like meaningful hand-written cards, or offering your services, like help with lawn care.

Playing the Lottery

If you’re a thrill-seeker like me, sometimes nothing is more exciting than the possibility of winning millions. Unfortunately, that happening is also CRAZY improbable. For example, you are more likely to be elected President of the United States. You are more likely to be the parent of identical quadruplets. You are more likely to be killed by a falling coconut. And you better start practicing your acceptance speech, because you are more likely to win an Oscar. I could go on, but I think we all get the picture. It’s a waste of money. Ironically for every lottery ticket, you buy, your chances of one day becoming a millionaire go down.

To be quite honest, there are a million and one ways to go broke. The good news is there is always that time-proven solution to count on, saving. If you would like to read more about helpful saving and budgeting tips check out these articles linked below!

https://www.sunmarkbank.com/blog/7-financial-resolutions-new-year

https://www.sunmarkbank.com/blog/6-smart-money-moves-make-your-return