by Damon Carr, For New Pittsburgh Courier
I liken social media to stand-up comedy. You can test various jokes or ideas and get instant feedback. When I returned to writing, my first published article was, “How can you be Bored and Broke?” I shared the article on social media. The article did numbers. I’ve shared several articles and memes since then. I have yet to duplicate those numbers. Recently I shared a meme on social media. It was titled, “Why some People stay Broke?”
This meme did so well and sparked so much conversation within a group of 78,000 members they took it down. This experience made me look back at various subject matters that I posted on social media. I notice, every time I mention the work “Broke,” it generated massive feedback—both positive and negative. What’s a writer to do? “Double-Up and Double Down!” I mentioned the word “Broke” twice in the title of this article.
When I was a kid, we used to joke around saying, you might be ghetto if….We’d name something funny we’ve observed that you can only appreciate in the hood. We’re going to do something similar in this article. But first let’s define “Broke” and distinguish it from “Poor.”
Ric Edelman said “Broke” is a matter of the wallet. Poor is a matter of the mind. You can fix broke. Poor? Not so much. To be broke is to be completely out of money. You can earn a high income, spend it all and be broke. Being in debt is worse than being broke. When you’re broke, you simply need money. When you’re in debt you need money to pay the debt only to end up broke. Regardless of your income level, if you’re a non-saver you’re going to eventually end up BROKE. Saving is the cornerstone of financial stability. Not saving is stupid. You cannot out-earn stupidity. That should be obvious, but it’s not. So, we’ll delve deeper. You might be broke or end up broke if you don’t identify and fix what I’m about to list below.
Myopic Perspective—Woe it’s me! The little man can’t get ahead. Nobody wants to see me win. Poor is a state of mind. You have to fix your “stinking-thinking.” You are what you think. If you think that you’ll be broke and miserable the rest of your life you’re right. You’ve accepted the status quo and refused to do anything about it.
Too lazy to work—You don’t work, you don’t eat—so says the Bible. If you’re of sound mind and able body and you refuse to work because you don’t feel like it, WOE! It’s YOU! Your ability to work is your greatest asset. Your income generated from working is your largest wealth-building tool. If you’re avoiding working because you don’t want to pay child support or you think some “captain save a chick” is going to rescue you, apply for Social Security Disability; you’re mentally unstable. Good luck with getting approved.
Fishing for compliments—You go girl! You’re the man! We all love compliments. Are compliments worth our financial stability? Suze Orman said, “People spend more than because they feel less than. There’s nothing wrong with having nice stuff as long as you act your wage and ensure there’s money left over to save after you pay your bills.”
Dreads the B-word—People think they’re limited and restricted by budgets. What limits and restricts you is your income, not your budget. A budget is a spending saving and investment plan. If you want to spend more, save more, and invest more, you need to earn more. Easier said than done, right? It requires less effort, blood, sweat, and tears to reduce expenses than it does to increase income. A budget allows you to prioritize your money, life, and time.
Saving isn’t a priority—Money you save today is your future goals, future lifeline, or future paycheck. Money talking. If you save me today, I’ll save your tomorrow. Yet the average person saves less than $.05 for every $1.00 earned. No savings equals no financial stability. Low savings equals no financial security. Inability to save means you’re doomed to financial ruin.
Debt is hazardous to your wealth—Credit increases your purchasing power but reduces both your standard of living and your net worth. When you use credit, you pay more because of interest. When you use credit, you allocate a portion of your income to payments for an extended period of time. Hard to save when you owe. Use credit wisely? NO! Use credit only when absolutely necessary! Broke people consistently pay interest. Wealthy people consistently earn interest. You may think they’re wealthy. They should earn interest. They became wealthy by avoiding debt and saving money, earning compound interest instead of subjecting their hard-earned income to a lifetime of payments.
Those are the major keys to staying broke or ending up broke. Following are other reasons you might be broke if:
• You own a car you can’t afford
• You own a house you can’t afford
• You don’t invest in yourself
• You don’t have any goals
• You’re an impulsive shopper
• You buy liabilities instead of assets
• You don’t have an emergency fund
• You blame others for your financial demise
• You purchase financial products you don’t understand
• You don’t separate wants from needs
• You have poor spending habits
• You don’t seek to understand personal finance
• You spend more than you earn
• You don’t consistently save or invest
• Your money seems to magically disappear with nothing to show for it
• You make emotional purchases and confuse fun for happiness
• You’re not properly insured
Who wants to be broke? Nobody! Heed the advice. Identify areas where you may be falling short and fix it. Those of us who are 40 and over, we made our fair share of financial mistakes. Our working years are numbered. We don’t have time to keep repeating these mistakes and expecting our mistakes to fix them.
(Damon Carr, Money Coach can be reached at 412-216-1013 or visit his website @ www.damonmoneycoach.com)