Tired of Being Broke? 9 Practical Steps to Change Your Finances

Are you tired of being broke, living paycheck to paycheck and barely getting by? If you can relate to this, then this article is for you.

The constant juggling of bills, the sinking feeling when unexpected expenses arise, and the frustration of never getting ahead, can be exhausting. Trust me, I know because I’ve been there.

But here’s the thing – feeling tired of being broke doesn’t have to be your permanent reality. In fact, it can catalyze a transformative change in your financial life.

So, if you’re ready to break free from the cycle of always feeling broke, you’re in the right place.

In this article, I’m going to share with you 9 practical steps that helped me transform my finances so I no longer feel tired of being broke.

Possible Root Causes of Why You Are
Tired of Being Broke

Before we get into the steps to stop feeling tired of being broke, it’s important to first understand the root causes of why you may find yourself in this situation.

Reflecting on the reasons why you’re constantly broke can offer insights into your spending habits and financial mindset. This understanding can help identify areas for improvement, so you can develop a specific plan for financial success.

Here are some possible root causes that can lead to people feeling tired of being broke:

low wages
high expenses
impulse spending
negative money mindset
lack of financial literacy

Exploring these reasons and others can provide valuable insights into your spending habits, lifestyle choices, and overall financial mindset. This understanding can lead to positive growth in your finances.

9 Steps to Take to Stop Feeling Tired of
Being Broke

Here are the 9 steps I took to break free from the exhausting cycle of feeling tired of being broke.

These practical strategies helped me regain control of my finances and finally put an end to the exhaustion of living paycheck to paycheck. If you’re tired of being broke and ready to take charge of your financial future, these steps are your roadmap to success.

Step 1: Reduce Expenses

The fastest way to stop being broke is to reduce your expenses. This is the first step because its positive effect can be felt immediately.

Take a close look at your monthly bills and identify areas where you can trim unnecessary spending.

Reducing monthly expenses might involve making small sacrifices, like canceling unused subscriptions, streaming services, or gym memberships, and even maybe reevaluating your utility providers for potential savings.

I managed to cut my monthly expenses by $522 by reducing my cell phone bill, canceling two gym memberships, canceling my cable, and stopping my monthly nail service. But I did keep my monthly lash subscription as a personal treat.

Implementing cost-saving strategies in your daily life can also make a significant impact on your financial well-being as well.

Consider adopting strategies like meal planning to cut down on dining out expenses. For example, I started eating out for lunch on Fridays only and choose one night on the weekend to eat out. A potential benefit to doing this is possible weight loss.
Ordering groceries online and opting for pick-up can help avoid impulse purchases in-store. For me, ordering groceries online was a game changer. I constantly gave in to impulse purchases at the grocery store, especially when it came to sweets. Avoiding the inside of the grocery store has not only saved me money but also helped me lose weight.
You might want to consider canceling your gym membership and adopting home workouts, exercising at local parks, or participating in community fitness classes. I canceled my two gym memberships, purchased a treadmill from Facebook Marketplace, and bought some weights from Academy. These changes, along with the others I mentioned, contributed to my weight loss of 22 pounds.

By implementing these cost-saving strategies, you can effectively reduce your expenses and alleviate the feeling of being broke, while still enjoying a fulfilling lifestyle.

Step 2: Increase Your Income

To boost your income, consider several options. You could take on side hustles or freelance gigs in areas where you have skills or expertise, such as graphic design, and writing. You can tutor on Outschool, pet sit, or even donate plasma.

Another avenue could be exploring part-time job opportunities that align with your schedule and interests, like retail, hospitality, or delivery services.

If you’re looking for ways to increase your income, check out my posts at the end of this article which cover various strategies for boosting earnings.

Step 3: Create a Budget

Budgeting is the cornerstone of effective financial management, providing you with a clear overview of your income and expenses.

Many people see a budget as something that limits them from enjoying life, but it’s the opposite, a budget can help you enjoy life even more because you are no longer feeling broke, living paycheck to paycheck, and no longer stressing money.

A budget is a financial tool and plan for your money that helps you make responsible, financial decisions. It helps you spend within your means and sets you up for future success by helping you save money.

To make a budget follow these steps:

Determine your income: Start by calculating your total monthly income. Include all sources of income, such as salaries, wages, bonuses, freelance work
List your expenses: Make a comprehensive list of all your expenses. Categorize them into fixed expenses (such as rent/mortgage, utilities, insurance premiums) and variable expenses ( groceries, transportation, entertainment).
Calculate your total expenses: Add up all your expenses to determine your total monthly spending. Be sure to include both essential and non-essential expenses to get an accurate picture.
Identify areas for adjustment: Compare your total income to your total expenses. If your expenses exceed your income, you’ll need to identify areas where you can cut back or reduce spending. Look for discretionary expenses that can be trimmed without compromising your basic needs.
Create your budget: Use a spreadsheet, budgeting app, or pen and paper to organize your budget. List your income at the top and subtract your expenses below, ensuring that your total expenses do not exceed your total income.
Monitor your budget: Regularly track your spending against your budget to ensure you’re staying on track. Review your budget periodically and make adjustments as needed, especially if your financial situation changes.
Stay disciplined: Stick to your budget and resist the temptation to overspend. Practice self-discipline and make conscious choices to prioritize your financial goals over short-term desires.
Review and adjust: At the end of each month, review your actual spending against your budgeted amounts. Identify any discrepancies and adjust your budget as necessary for the following month.

By following these steps, you can create a realistic budget that aligns with your financial goals and helps you manage your money effectively.

Step 4: Pay off Debt

In your journey toward financial freedom, few obstacles loom larger than the burden of debt.

Debt is more than just a financial obligation; it can weigh heavily on you and your family, taking a toll on both your emotional and financial well-being.

The constant worry about mounting debt balances and looming deadlines can create a sense of unease and anxiety, affecting mental health and overall quality of life.

Whether you’re navigating credit card debt, student loans, or other financial obligations, there are effective strategies that can help pave the way towards a debt-free future and renewed financial well-being.

Debt Repayment Strategy: Snowball Method

The Snowball Method is a debt repayment strategy where you focus on paying off your smallest debts first while making minimum payments on larger debts. As each small debt is paid off, you roll the freed-up funds into paying off the next smallest debt.

This approach provides psychological motivation and momentum as you see tangible progress early on, empowering you to tackle larger debts with renewed confidence.

Debt Repayment Strategy: Avalanche Method

The Avalanche Method is a debt repayment strategy where you prioritize paying off debts with the highest interest rates first, regardless of the balance. By focusing on high-interest debts, you minimize overall interest costs and accelerate your debt repayment progress.

This approach is financially efficient and can help you save money in the long run by targeting the debts that are costing you the most.

When it comes to paying off debt, there’s no one-size-fits-all approach. The key is to choose a method that aligns with your financial goals, preferences, and circumstances.

Whether you opt for the Snowball Method, the Avalanche Method, or another debt repayment strategy, the most important thing is to stay committed and consistent in your efforts.

Step 5: Practice Financial Discipline

In managing your money, learning to be disciplined is like having a superpower. It’s the foundation for making smart choices and taking good care of your finances.

Cultivate healthy financial habits, such as saving regularly and avoiding impulse purchases. These habits can help you build a strong financial foundation and stay on track with your debt repayment goals.

Set SMART financial goals—ones that are Specific, Measurable, Achievable, Relevant, and Time-bound. Having clear, well-defined goals will keep you focused and motivated throughout your debt repayment journey.

Stay motivated and persistent on your journey to financial stability. Celebrate your progress, no matter how small, and remind yourself of the ultimate goal: achieving financial freedom and peace of mind.

Whether you’re aiming to pay off debt, build savings, or invest for the future, embracing financial discipline is the key to unlocking your path to financial freedom and realizing your long-term aspirations.

Step 6: Build an Emergency Fund

Building an Emergency Fund is a critical aspect of financial planning, providing a safety net to cushion against unexpected expenses or income loss.

When saving for emergencies, it’s important to employ effective strategies that facilitate consistent and disciplined saving habits. One approach is to automate transfers from your checking account to a designated savings account, ensuring that a portion of your income is set aside for emergencies each month.

Deciding where to keep your emergency fund is equally important. Options could include a high-yield savings account like Ally

HYSA typically offers higher interest rates compared to traditional savings accounts, allowing you to maximize the growth of your savings over time.

Step 7: Invest for The Future

Even when facing financial hardship, investing for the future remains paramount. While it may seem challenging to invest when finances are tight, making even small contributions to investment accounts can yield significant long-term benefits. Consider starting with low-cost index funds or retirement accounts that offer tax advantages.

By prioritizing investing, you can harness the power of compound interest and set yourself up for financial success in the years to come. Remember, consistency is key, so aim to contribute regularly and resist the temptation to withdraw funds prematurely.

With patience and discipline, investing for the future can help you achieve your financial goals and secure a comfortable retirement.

Step 8: Get a Financial Education

If you can’t invest in the stock market YET, you can invest in yourself by learning new skills. Whether it be financial literacy skills or upskilling to increase your income, there is no better investment than yourself.

You can learn new skills on YouTube for free or on platforms like Coursera or Udemy for more structured and comprehensive courses. Additionally, consider seeking out local workshops, seminars, or universities like Western Governors University can help you further expand your knowledge base.

With so many resources available, there’s no shortage of opportunities to invest in your personal and professional development.

By dedicating time and effort to improving your knowledge and expertise, you can enhance your earning potential, make informed financial decisions, and ultimately achieve greater financial stability and success.

Remember, investing in yourself is an investment that yields lifelong returns.

Step 9: Change Your Mindset

The final, and arguably most crucial aspect, is mindset. Why is it so significant? Because without a mindset change, behavioral change is unlikely. Your beliefs and perceptions about money greatly influence your financial decisions.

To make different choices, it’s essential to change your mindset first. People with a negative money mindset often think things like

I can’t save money.
I’ll never afford my own house.
My parents were bad with money so I’m bad with money.
Investing is too difficult to understand.

Shifting to a positive money mindset can empower you to take control of your finances, build wealth, and achieve your financial goals.

By adopting a growth mindset and believing in your ability to learn and improve your financial situation, you can overcome limiting beliefs and create a more prosperous future for yourself.

FAQs

How do I stop being broke?

If you’re wondering, “How do I stop being broke?” the key lies in taking proactive steps to improve your financial situation. Start by assessing your current financial habits and identifying areas where you can make changes.

What amount of money is considered being broke?

The amount of money considered being broke can vary depending on individual circumstances and financial obligations. Generally, being broke implies having insufficient funds to meet basic needs or cover necessary expenses. For some, being broke might mean having zero dollars in their bank account, while for others, it could mean struggling to make ends meet despite having some savings.

What should you do when you are financially broke?

When you find yourself financially broke, it’s essential to take proactive steps to improve your situation. Start by assessing your financial standing and identifying the root causes of your financial difficulties.

Consider seeking assistance from financial advisors or credit counselors who can provide guidance and support. Explore opportunities to increase your income through part-time work, freelancing, or other means. Additionally, take steps to reduce expenses and eliminate unnecessary spending.

Conclusion

If you are tired of being broke then you will require commitment, discipline, and a proactive approach to managing your finances.

By implementing the 9 practical steps outlined in this guide, you can take control of your financial future and work towards achieving lasting stability and prosperity.

Stay focused, stay motivated, and embrace the journey towards financial freedom. Here’s to a brighter and more prosperous future in 2024 and beyond.

Related Posts:

Possible Root Causes of Why You Are Tired of Being Broke

9 Steps to Take to Stop Feeling Tired of Being Broke