Being broke sucks. I’ve had extended periods in my life where I have been living on the edge of financial ruin, so I know how stressful and overwhelming it can be.  When you’re broke and hating your job, things are much worse. It's hard to leave ANY job, regardless of how insanely miserable it is. This is the reason I still need to work at my loathsome job as a financial planner.

Over the last 9 years working in financial planning (and struggling with my own budget), I have seen some commonalities when it comes to people living beyond their means.

Struggling with a job you hate job is hard enough, but when you never seem to have enough money to pay the bills, let alone get ahead, things can be damn depressing. Financial stress is extremely difficult on you, your marriage, and your children.  I am speaking from personal experience here.

Getting ahead financially is not especially difficult, even in the absence of a high paying job. It all comes down to your spending habits. It seems so simple; spend less than you earn.  In reality though is much more difficult than that.

Our society has taught us how to be greedy, needy, over spenders. In fact, it's empowered us to be downright irresponsible.  We want what we want and then we go buy it!  If we don't have the money, we buy it anyway.

With this in mind, here are the top 5 reasons that you will always be broke:

1. Your Spouse Is Out Of Control.
   I've seen this time and time again. A non-working wife decides that she needs to fill her empty day with spending their money on anything and everything that looks remotely interesting. Ok, this is a little extreme, but having a spouse that is out of touch with the family finances (and reality), is very difficult to manage. If both partners are not on the same page with the money, things can, and usually do, get very ugly.


2. You're In Denial.
   Millions of people reside here. This is when you refuse to accept that you need to take a serious look at your financial picture. Doing so would mean you might actually have to stop spending and do without the things that your cool neighbor has.  Who wants to do that?


3. You Are A Dreamer.
   I worked for a multi-level marketing (MLM) company about 15 years ago and I was taught that if I followed their "proven system", I would become wealthy. Guess what, thousands of us bought into it. We spent like we didn't have a care in the world, hell, we we're going to be RICH in 5 years. As it turns out, it was not what we all thought it was and the company, along with our hopes of becoming a millionaire, went down the toilet.
   
   Dreams are fine and long as long as the execution plan is injected with a sense of reality.  Blindly following hype is a sure path to pain and agony.


4. You Have No Budget.
   Budgeting is a word that strikes fear into our hearts and sends us running for the hills. Why? Because it's absolutely boring, limiting, humbling, and at times depressing.  At work, I have no problem building Excel spreadsheets and PowerPoint Presentations all day - still, I hate doing a budget. Now imagine the regular person who has no financial background and doesn't even know what Microsoft Office is. Are they going to budget? I think not.  Calculators and graph paper don't have a ton of appeal.


5. You Waste Too Much Money.
   This is supremely obvious, but you would be surprised at how few people actually track their discretionary spending. In know, in your brain right now you're saying that the last point was 'budgeting'.  I'm not talking about that here.  I'm talking about tracking.  People don't think about the coffee and bagel in the morning or the afternoon soda and candy bar they buy, but guess what? They will have spent around $1,700 in a year on this stuff. The $1,700 that could have taken your family on vacation.
   
   Start tracking every dime you spend and you will see the difference!  Once you've tracked, you can budget.  Without tracking, you have no idea what needs to me eliminated or limited in the first place!

There are a number of other reasons why you could be broke, but these are the 5 most common I've seen. So what do we do?

How NOT To Be Broke
It is certainly possible to turn our finances around and actually start showing in the black, but it takes work, often A LOT of work.

Here are 5 ways to avoid being broke:

• Talk With A Professional.
  This IS NOT a solicitation to get your business or to endorse any service! Remember, I hate my job and don't really want to help you manage your money. However, I do recommend finding a Certified Financial Planner (CFP) that can help you implement a comprehensive financial plan. Let's face it, most people are clueless when it comes to money.
  
  I have clients with $500k in cash that don't have any idea what a mutual fund is. It's not that they're stupid, they just never took the time to learn. On top of that, investing jargon is confusing and often intimidating.


• Use Cash Only.
  Say what!!! Too many people fall victim to thinking they can just use their credit card this one time and they will pay it off when the bill comes. That one purchase turns into two and then into $40,000 in Visa and MasterCard debt. If you think you're smarter than that and are going to use your debit card instead, I've got news for you - it doesn't work either. You will end up over spending and getting  slammed with $35 overdrawn account fees (and those annoying letters telling you about it). Budget out your needs for the month and use cash only. Use the Envelope Method to control spending. It's cheesy, but it works.


• Cut Your Expenses.
  I'm not talking about canceling your power or living off of Ramen Noodles, I'm talking about things like limiting eating out, avoiding buying movie theater snacks (a $5 candy bar, really?), reducing your tv cable stations from 800 to 200, and generally avoiding buying anything on impulse. It can be done, it sucks big time, but it can be done.


• Set Up Automatic Savings From Your Paycheck.
  This is one of my favorites because we totally forget that we are saving. I, unfortunately, have never been a good saver. I am fantastic at spending, but not so great at putting money away. Once you figure out exactly how much money you have going out each month, take a portion of the excess and have it taken out of your check and put into some form of savings vehicle. Also, put it into something that is not readily liquid. You will be much more likely to take it out and piss it away if it's sitting in cash at your bank. Buy a CD with a early withdrawal penalty or a Mutual Fund which charges a fee if you sell it before a certain period.  Perhaps that will deter spending.  (note: Don't use those account types for emergency funds.  You can't get penalized for needing money when the furnace breaks!)


• Educate Yourself.
  Many of the folks who struggle with their bills are not educated when it comes to finance. People tend to bury their heads in the sand when the topic comes up. You cannot afford to do that anymore. Go find a book on personal finance and spend some time reading and understanding it. You should at least know the basics.  The more you understand about money, saving, investing, budgeting, etc., the more likely you are to take control of your finances. If you let it control you, you will always be broke.

The bottom line is that if you're living beyond your means, you MUST take control of the situation immediately. I have seen too many people lose everything because they just couldn't get it together.

Don't let that be you too.