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10 Beliefs And Financial Decisions That Keep You Broke



Most people have no clear direction on how to manage money. They buy things they don’t need, mortgage their way through a lot, and fail to believe in their personal ability to liberate themselves from a financial fall. These negative beliefs and attitude towards money keeps over 70% of the population in every country in the lower ranks of the economy, with a heavy dependence on their various governments.

Living paycheque to paycheque and clearly not having a plan on how to manage your finances will leave you broke, month-in month-out.

Rather than looking out for quick loans, payday loans, or searching for how to make money online or offline, you should realign your focus and place it on first changing your attitude towards money.

When you understand how to manage your current income, reshape your beliefs, and make good financial decisions, your personal net worth would be far from broke.


Here Are 10 Beliefs And Financial Decisions That Keep So Many People Broke:


1). I Don’t Have What It Takes:

This is probably the greatest reason many people remain broke or never succeed in life. Before they even try, they negate themselves, and go even lower in their ranks.

The belief in one’s self and ability is the first step to making your dreams come true. If you cannot visualize yourself in that status, you’d never draw up a plan to get there.

Irrespective of whatever you may have been through in life, a superior belief in one’s self than in anything else is crucial to your overall success.

If you want to stop being broke and positively shape up your finances, begin to see yourself where you want to be, and do whatever it would take to get you there.


2). Money Can’t Buy Happiness:

The second a broke person joins the band wagon of people saying money can’t buy happiness, you’d know they’ve probably given up trying, and are trying to console their weak attitude towards solving their money problems.

Also avoid listening to this same phrase from the rich. They may have it all, be able to spend on vacations, luxury cars, and may have experienced critical problems money can’t solve, but that doesn’t give them the right to stop you from changing your financial mindset.

A wealthy person who tells you money can’t buy happiness can still cry in his/her Mercedes. Where would you cry in if you had the same predicament as them? A public bus?

No matter how they place it, facing your problems from a wealthy stance trumps any other situation.

If you’re serious about changing your financial status from a broke state, you need to start realising that money can make you happier in some ways.

Remember, “money can’t buy happiness, but poverty can’t buy anything!” Choose wisely.2


3). Choosing To Mortgage Rather Than Pay Cash:

When a person who’s capable of buying out a certain item chooses to pay installmentaly over a long period of time, a large financial mistake has just been made.

Mortgage-like payments are silent financial killers. They’re constant monthly reminders that you’re not the real owner of what you’re paying for (yet). This doesn’t just put your finances in a fix, but also makes it difficult for you to have some savings or investments, especially when your monthly income is low.

Knowing that you could take just a little sum of your money to make monthly payments, makes a mortgage seem stress free, but by the third month and comparing the number of your other financial obligations, you realise you having nothing left to yourself.

Another common disadvantage of mortgaging (depending on the financial institution providing it) is, the property or item you acquired could be reclaimed from you, or the interest rate could be highly increased if you default on your payments for a period of time.

For example, if you’ve being paying the mortgage on your house for the past 12 years, and defaulted heavily on several repayment terms (usually on a non-payment for three months and more), all the payments done through the years would go to waste, and you could be left without both a refund and a house.

If you’re serious about owning a property, car, or whatever you wish, buy out if you can. But if you can’t, plan a long term acquisition model that would work better for you, than mortgaging your way through it.


4). Increasing Your Standard Of Living With Every Income Rise:

With every income rise of most people, their standard of living follows suite. These individuals live in the moment with their better statuses and forget that they are always one signature away from losing their jobs.

When your income rises, the logical step is to use your additional income to increase your asset base, while you maintain your current lifestyle, or make it a little bit more modest.

If your standard of living keeps rising exponentially with every salary raise or higher income earned, you could be back to square one after many years of financial ignorance.


5). Trying To Keep Up With Your Rich Friends:

Your colleague drives a new car to work, your neighbour buys the SUV everyone has been talking about, and some of you friends post photos of their luxury vacation to Thailand. The fact they are looking lavish and having all the expensive fun makes you feel entitled to it. But it shouldn’t.

The habits of the world’s most successful people before they got to their status, never involved spending most of their savings on trying to impress people. Instead, their lifestyles never drew any attention to them till their wealth could no longer stay hidden, and began to speak for itself.

Never follow the crowd. You can cheer them on their luxury cruises, while you create the experience the crowd pays for. Someday, their hard earned money would be going instead, into your own pockets, and you can live your life however you choose without the fear of a financial breakdown.


6). Buying Brand New Vehicles Instead Of Used:

When you’re still a middle-class or lower-class citizen, buying a brand new car is a total waste of money. There are used cars that are priced far lower, and still look almost as good as the brand new model.

People who buy brand new cars mostly put up the argument of not having to spend on repairs and several other issues a used car may encounter, but forget the second they paid for the brand new car, it’s value immediately depreciated.

Buying a brand new car is equivalent to throwing out $100 from your window every week for the next few years. Eventually, it’s value becomes worthless.

Your best bet as a person trying to change your financial situation is to only purchase good-looking used cars, and drive it till your finances have greatly improved, together with some valuable assets attached to your name. Doing this places part of your financial decisions on a positive route to getting you out of the rat-race.


7). Spending Your Future Today:

When you spend the profits your business generates before reinvesting it to multiply itself severally, the financial illiteracy exhibited wouldn’t just keep you broke, but would ensure you don’t own a business eventually.

Profits are meant to be reinvested over and over again. Where you reap from your investments at the beginning stages should only be from monthly allocated salaries.2

If you spend your future today before they have a chance to mature and prove their worth, you’d never make it to the fast track.


8). You Don’t Make And Stick To A Budget:

Budgeting is one of the most disciplined approach to ensuring you never exceed your expenditure mark. It’s like a finance 101 course which you must pass before you move on to the next year. Despite it’s importance, most people don’t stick or keep to a budget.

By thinking you don’t need a budget and assuming all your expenses can be controlled without one, your financial status wouldn’t eventually experience a meltdown, but would be coupled with some form of financial hardship.

Sticking to a properly planned budget will help you know where your money problems are coming from, and how you can improve to positively affect your finances.


9). You Have No Emergency Fund:

An emergency fund can be termed as a sum accumulated over a period of time through part-savings, only to be used on the rainy days.

When you need urgent cash to solve emergency problems and realise you have none or don’t have enough, it simply shows you have no emergency fund in place.

The wealthy always have something set aside to save them from a financial disaster. They keep those funds separated, so their financial future and status can be maintained.

If you cannot make good financial decisions like cultivating the habit of setting up an emergency fund for your unplanned events, then you may never break out of your financial bracket.


10). You Don’t Pay Yourself First:

This is one of the top reasons many people end up broke or poor. By paying yourself first, you put at least 10% of your income in a separate account to be used for future investments, emergencies, and other purposes.

Before you make financial decisions on how to spend your income, first take out a portion of it and place it in a savings account that must remain untouched till a viable business opportunity crops up.

Paying yourself first before any form of expenditure is one of the smartest financial decisions you will make as a person.



What are your thoughts on these 10 beliefs and financial decisions that keep people broke? Let me know by leaving a comment below.


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