I Make Good Money Why Am I Always Broke? (2024)

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Stop Saying: “I make good money why am I always broke?”

So this post is going to be a bit of tough love. If you keep saying, “I make good money why am I always broke,” it is time to make some changes in your financial life.

There is a reason you are broke – either your spending is completely out of control, or your debt is out of control.

If you are tired of always being broke, then you have to decrease your spending, get out of debt and find a way to make extra money.

Like I said – TOUGH LOVE!

The other day, I heard a speaker say that the difference between being poor and constantly broke was that the poor person didn’t have the money, the broke person was mismanaging their money.

Money mismanagement is the biggest reason you make good money and yet are still constantly broke.

If you aren’t managing your money, then it is managing you.

So how do you get out of the “constantly broke” trap?

Editors Note: I highly recommend downloading my Free Personal Financial Plan Template to help you get started.

If you want to stop saying “I make good money why am I always broke“, then you need to look at the following behaviors:

1. Why am I always broke? Because you don’t know where you are spending your money!

You will always be broke unless you know where you are spending your money. How many time do you walk out of the grocery store and realize when you get to your car that you don’t have a clue how much money you just spent?

Your spending habits and lack of attention are constantly keeping your broke!

It is so easy to lose track of your spending unless you are constantly paying attention. If you stop paying attention even for a few minutes you’ll find yourself spending more money then you planned.

You have to track every dollar that you spend.

How to stop being broke: You have to start by determining where you are spending your money

I know it is a huge hassle, but start simple by writing down all of your daily expenses. Once you start adding up your daily expenses, I can guarantee that you are going to be surprised at how much money you are wasting.

Your spending habits are making you poor.

2. Why am I always broke? Because You Don’t Budget!

I know, I know – everyone hates budgeting. Seriously though, it is surprisingly simple once you get started.

Once you actually get a working budget and are successful you will literally feel like you got a raise. I know it sounds crazy, but try it out for a few months and you’ll be shocked at how much money you can save just by using a budget.

How to stop being broke: You have to set up a budget

Check out these posts for additional information on how to set up a budget:

Budget by Percentage: Create a Minimalist Budget
How to Budget if you have an Irregular Income
How the Two Unbreakable Rules of Budgeting Will Change Your Life

If you want to keep things super simple, then I recommend checking out Mint. It is literally the easiest way of budgeting online. They do all of the work for you. Once you get all of your accounts linked you’ll quickly begin to see where your money is going and see why you are so broke.

If you like the old fashion way, then use the envelope system. It seriously rocks and is how I got started with my budgeting.

3. Why am I always broke? Because you are in debt up to your ears!

Take a few minutes to add up your debt and then add up your monthly debt payments. I bet the number is going to shock you. I know it shocked us and started us on our path to financial freedom. We were paying $4,175 each month towards debt payments.

Once you have the monthly number take a look at how much of your monthly payment is going towards interest. For us, that means we were paying $1,975 monthly on interest. That is the number that is really going to get your blood boiling and hopefully help you change your spending habits.

How to stop being broke: You have to start aggressively paying off your debt

Debt is seriously the worst thing in the world when you are already broke.

It just sits there and adds up and before long you are in more and more trouble. I’m going to be blunt. Getting yourself out of debt is going to be one of the hardest things you will ever do in your life.

Here is the deal though – once you start making progress it is seriously the most amazing thing ever! I can not tell you how much easier and less stressful our lives are now that we are only down to a house payment.

My husband works on commission so when the lean months hit, it sucks, but it isn’t anywhere near as stressful as it used to be. I can still breath and I don’t feel like my world is caving in.

To stop saying, why am I always broke and start your debt reduction journey check out these posts:

Tired of Debt? How We Paid Off $293,000 in Debt in Five Years
How To Start Your Debt Reduction Journey
How to Pay Off Debt When You Have No Money

4. Why am I always broke? Because you constantly spend money

Let’s keep it super simple – STOP SPENDING MONEY. You are always broke because you are overspending!

How to stop being broke: You have to make a conscious decision to control your spending.

This step is hard, I get it! But you can’t get ahead financially unless you are going to limit your spending.

To stop being broke you’ve got to dig deep and really review your spending patterns.

What is causing you to overspend?
Where are you spending your money?
How much money are you wasting on a daily, weekly or monthly basis?
Where can you cut costs?

Part of reducing your spending involves changing your mindset.

You have to learn to simplify your life and stop trying to keep up with the Jones. If you are using spending as a form of recreation, you’ve got to switch things around in your mind and find ways of changing your attitude towards money.

One of the best things I did to reduce my spending was making a game out of saving money. I know it sounds dorky, but I turned finding good deals into an art form. Saving money and finding the best deal became a form of entertainment.

I do a lot of little things like using the Ibotta app to save money at the grocery store.
I use Walmart Grocery Pickup services (I save so much money and time not going into the grocery store.
I try and always use Ebates when I’m purchasing items online.
I aggressively searched for ways to cut my current expenses – How to find and eliminate spending leaks.

There are literally hundreds of things you can do when you are finally tired enough of being broke to make changes.

The first thing you have to do is determine what your true wants and needs are. It is super easy to convince yourself that the things you want are really needs and then rationalize spending money.

If this is something you struggle with check out this post: Want or Need: How to Control Your Spending Habits

If you just need general money saving tips then these posts are a great place to start

14 Money Saving Tips to Lower Your Grocery Bill
6 Ways to Save Money On Your Current Bills
How to Find and Eliminate Spending Leaks In Your Budget

5. Why am I always broke? Because you don’t have an Emergency Fund!

An emergency fund is your protection against Murphy’s Law. Something is going to go wrong and you will experience financial hardship. If you have funds set aside to cushion the blow you are going to have a much easier time dealing with all of the junk that happens in your life.

When you are broke and an emergency occurs, you just go deeper into debt to fix the problem. Having an emergency gives you a little bit of a buffer between the craziness of life and your money.

How to stop being broke: You have to start building an emergency fund asap.

Ideally, you will have a 3-6 month emergency fund, but at minimum work towards $1,000. Just put a little bit aside every day and you’ll be shocked at how quickly the money will accumulate.

I’ve becomea huge fan of DIGIT. I seriously think it is one of the easiest ways to set up an emergency fund. If you have struggled to save money in the past you need to check it out. Read my review here: How to Automate your savings plan in 5 minutes.

Even if you think you are completely broke, I recommend signing up for DIGIT. You’ll be pleasantly surprised to look up a few months from now and actually see the beginning of an emergency fund. If you only do one take away from this post, join DIGIT – I promise you won’t regret it.

Are you Prepared for an Emergency? 5 Tips to Help Start Your Emergency Fund
How Our Emergency Fund Saved Us $1,500
4 Questions to Ask Before Using Your Emergency Fund

6. Why am I always broke? Because you don’t make enough money!

One of the best ways to reduce debt and built up your emergency fund is to make extra money. I know a lot of people who are budgeting, cutting costs and doing everything right but have an income issue.

If this is you, then it is time to start a side hustle or pick up a second job.

How to stop being broke: You have to start being creative and find ways of earning extra money

Personally, I love the concept of starting a side hustle when you are not making enough money. There are literally hundreds of ways to earn a little bit of extra money on the side. When you’re broke earning an extra $200-500 per month can make a huge impact.

If you need help getting started check out my new book – “How To Start Your First Side Hustle.” It has a ton of information on how to find the perfect job to help you earn extra money.

If you are ready to earn some extra money check out these posts for inspiration:

48+ Side Hustle Ideas to Earn Extra Money
4 Ways to Earn an Extra $100-200 This Weekend

7. Why am I always Broke? Because you haven’t started saving for retirement.

I know, you are thinking I’m broke, of course, I’m not saving money for retirement. I get it! It is really hard to set money aside when you can barely pay the bills and feel like your creditors are constantly knocking on the door.

Here is the deal though (tough love remember!). If you don’t prioritize your saving goals, no one is going to do it for you. You have to start putting money aside for retirement right now.

How to stop being broke: Pay Yourself First!

My number one rule of personal finance is to always, set aside money and pay yourself first! I know it sounds crazy, but if you make a commitment to yourself to save a small percentage of your income every single month, you will completely change the way you manage money.

I personally recommend setting aside 10% of your income to pay towards your financial goals.

Once you have started putting aside a little bit of money you will be surprised at how quickly it begins to add up. To change your life, all you need to do is pay yourself first.

I’m a huge fan of retirement through IUL insurance and highly recommend reading this post to help you get started – Is a 401K Plan Worth It – Why You Should Dump Yours.

Stop Saying, I make good money why am I always broke

I know it sounds crazy, but becoming a personal finance expert really isn’t that hard. If you follow these six steps, you will quickly stop asking why you are always broke, because you will know exactly where your money went and have a plan to cut your spending and keep more of your own money in your pockets.

I know it sounds ultra cheesy, but seriously, you can do this! Don’t continue to constantly be broke. Just take the first step on the list and then the next and the next.

Start small and I can guarantee you’ll be changing your financial habits quicker than you ever thought possible.

PS. Don’t forget to download my Free Personal Financial Plan Template.