I was broke for a good chunk of my life and part of me actually convinced myself that I wanted to be that way. Silly isn’t it? Well, after studying finances and money for the last 4 years, I have come to 5 major turning points with money that helped me to stop the paycheck to paycheck cycle and finally start winning with money. So, if you’re wondering how to finally stop being broke, here’s your mini go-to guide!
Face your finances head on
Imagine you wanted to take a plan to Paris. What is the first thing you would need to do when looking for flights? List where you are coming from!
There is no point in seeing where you want to go without first knowing where you are starting out from.
This holds true for travel as well as your money. It’s crucial that you learn and understand what your current financial situation is so that you can make a solid game plan for getting yourself to a better, more financial stable place.
How to face your finances
You can start facing your money head on by doing the following things:
- Review your last 3 months worth of spending
- Calculate where all of your money is going Read about spending plans
- Understand your budgeting style Take my free right-brained budget training
Decide what you want to spend on the most
Raise your hand if you are someone who claims you want to just enjoy your life rather than stressing about spending money on a budget. You buy what you want when you want. But then…when you’re faced with a really awesome opportunity or a major financial emergency, you are crazy stressed because you are flat broke?!
Spending consistently on impulse buys and temporary fun will never ever lead you to long-term happiness or financial success.
Instead of spending your money impulsively whenever you feel like it, take a moment to really understand yourself and make a list of the things you really love spending money on! Then, you can spend without guilt!
Pay off debt
Sometimes we stress about debt payoff and say things like, “I don’t have money to pay off debt.” or “I don’t want to be putting all my money toward debt!”
The idea of paying off debt can really kick us in the YOLO mindset. It’s depressing thinking about putting more of our money toward debt, but in reality, there’s a good chance that most of your money is already going to it!
Getting intentional with a debt payoff plan can help you:
- Get out of debt quicker
- Payback less debt
- Have more money every month
In fact, the second you get intentional about debt payoff, you would be surprised at how quickly you can make a difference! See how we paid off $6,000 in 6 months.
Change your money mindset
Truthfully, this could quite possibly be the one and only tip to stop being broke forever. However, it’s an area that people struggle with the most!
Consider for a moment if you needed to have a certain amount of money in your life right now or you would lose your home, or you family would go hungry…I bet you would work pretty quickly to get more money in your life and you would find a way to do it.
This is called raising your money thermostat. If right now you are comfortable having $100 in your bank account, raising your thermostat would mean not being comfortable with anything less than $1,000.
Here are some of my favorite money mindset books to help you on this journey:
Give money away
This is a wild concept for most people and it totally goes against all logic. If we want more money in our lives, why would we consider giving more of it away?
So think about it this way, when you give money away, you have to unclench your fists and open your hands. Right? Now you can easily allow money to flow to you and from you.
When you clench onto money too tight no money is getting in BUT, money can still be yanked out. (Like a broken pipe in the middle of the night or a flat tire on the side of the highway.)
Experiment with generous giving, even if it means only giving away $5 cups of coffee once a week!