Thirteen years ago I was broke. I mean flat broke. I was stuck in a dead end job. I had a mountain of student loan debt, a smaller mountain of credit card debt, a new car lease, and a newborn baby.
I was stressed, depressed and anxious all the time. I felt like an elephant was permanently parked on my chest, like that guy in the COPD commercial. It really was a lousy way to live.
Fortunately, the birth of that newborn baby inspired something in me. I decided it was time to get my butt in gear, to be a man, and get about rescuing my family from the debt that held us all hostage.
Along the way I learned some painful lessons about myself, and I begin to recognize why others stay in this perpetual state of being broke.
16 Reasons Why You’re Still Broke
1. You buy a new car every four years. This described me pretty well from the time I hit 20, and well into my 30s. While I’ve never been a “car guy,” I still dreamed about a cool car when I was 16, and a nice car when I left college and started working, and an even nicer car when I got married.
To make those car dreams a reality I leased, then bought, then traded up and bought again, each time accumulating more and more debt.
2. You rack up $100,000 in student loan debt for a $30,000 a year career. It’s sad to see so many people willingly placing themselves into the bondage of student loan debt in the name of a degree.
I took on loans myself, though I managed to work part time and keep my final balance under $20,000. Still, it’s hard to start out on the right foot when you owe more than a starter home to Sallie Mae.
3. You use credit cards to buy groceries. Some will argue this is a savvy move, and if you are a responsible person who would never be tempted to charge just a bit more to collect reward points, I suppose it is pretty smart. Unfortunately, most people do not fit that category, myself included. Better to avoid the temptation and take a sharp pair of scissors to your plastic until you are ready to keep things in check.
4. You eat lunch out every day. I like to eat out as much as the next guy, especially for lunch when the walls of the office are closing in like that scene in Star Wars with the human trash compactor threatening to squeeze the life out of a young Luke Skywalker and his friends. But eating out gets expensive. Pick one day a week to eat out with coworkers, and brown bag it the other four days.
5. You think you deserve the very best of everything. When I found myself broke it occurred to me that I had acquired a taste for some of the finer things, and was using Visa to finance it. That is not sustainable. I still appreciate quality, but that is often not measured by a price tag.
6. You bought too much house. Being house poor stinks. Talk bout feeling trapped. How would you like to be stuck in an underwater mortgage in a bad economy? Millions of fellow Americans could tell you just how that feel.
7. You do nothing to prepare for bad times. Bad things happen. It is inevitable. Things break. People get sick. People have accidents. If you have no buffer between you and disaster you are asking for financial trouble.
8. You aren’t willing to work more than 40 hours a week. One of the things that finally helped me break the cycle of debt was working extra hours. I worked overtime at my full-time job. I worked a part-time job. I mowed yards for neighbors. Every extra penny I earned went towards repaying our debt. Every cent.
9. You take too many expensive vacations. My family likes to take an annual beach trip every summer. We don’t worry too much about being overly frugal, because most years, it is the only vacation we take.
Instead of several expensive vacations, we just do one, and mix in a few day trips here and there to see regional things that don’t cost a lot of money.
10. You try to impress strangers. One of the motivations I had to lease, buy, and trade up those cars that cost me a fortune in my early 20s was that I probably put too much effort into trying to impress others. I thought expensive cars were a sign of success. Trouble was, I had not yet found much success, so it was just a facade.
11. You save too much money for retirement. This one might look a little odd at first glance, but think about it. How many people do you know trying to max out a 401k while piling on consumer debt to finance their lifestyles? Seems a little ridiculous, doesn’t it.
12. You can’t tell people “No.” I’m still working on this one. I have a big heart and I want to help as many people as I can, but I have to keep reminding myself that my first obligation is to my family. You simply cannot say yes to every charity, every sad case you hear of, and every opportunity to “give back” that comes along.
13. You buy your kids too many expensive toys. Parents and grandparents, especially grandparents, often like to spoil their children with expensive toys. I get that. I’m a dad, and I love nothing more than to watch my kids’ faces light up when presented with a special prize. However, I don’t owe them that. I owe them security. I owe them stability – a warm place to sleep, clothes, protection, and hot food in their bellies. Don’t beat yourself up if all you can do is get by. You are a great parent, regardless.
14. You save too much in your kids’ college funds. Since the invention of 529 plans and educational savings accounts, parents have felt compelled to fully fund their children’s college fund from the time they are in diapers. That’s a noble goal, but many times parents go broke in the process, or forgo their own retirement savings.
Find the right balance, and remember there are no scholarship opportunities for old age, failing health and busted hot water heaters.
15. You buy new things instead of repairing old things. “Use it up, wear it out, make it do or do without.” I used to be the world’s worst at tossing something the first time it gave me trouble – weed eaters, DVD players – you name it. Now, I find myself enjoying the challenge of figuring out how things work, repairing them myself, and extending their useful life.
16. You cannot be content. I have discovered that a sure fire way to spend less money is to be content with what I have. I often lie in bed on a cold, rainy winter night and think of how grateful I am to have a roof separating me and my family from the harsh elements outside. I remind myself of the many reasons I am blessed, and all the things I’ve been wanting so desperately suddenly don’t seem so important.
Contentment is a powerful anti-debt drug.