Why Am I Always Broke?

Photo By Emil Kalibradov

Recently, I went for lunch with a friend, and the bill came to about 50 USD. It was mid-month and living a life of paycheck after paycheck, I felt a pinch swiping my card to that much. It was my last 50 USD. “My employer must be underpaying me, and I need to get a new better-paying job urgently.” I thought to myself on my way home.

Upon getting home, I calculated my monthly expenditure against my earnings so that I could figure out how much more I would ask from my prospective employer. To my surprise, my main expected expenditure (based on the market prices) was only a third of my net earnings. What happened to the other two thirds? This is when I resolved to track my spending for two months. The results were shocking. Below are some of the reasons why I am always broke.

Lack of A Budget – On payday, I would walk into the supermarket and take the biggest trolley, then pick everything that excited my eyes in bulk regardless of the cost. I called it ‘self-reward’. I ended up having 50% of the items that I never needed and no money. I resolved to always make a shopping list complete with prices which I adhere strictly to. My other resolution was to shop from a wholesale store where prices are cheaper as opposed to luxuriously pushing a trolley at the supermarket.

Impulse Buying - Ever passed by the mall and saw a nice shoe? What happened? Your guess is as good as mine. You developed an instant need. By the time you got home, you realized that it wasn’t even as pretty as you thought. The next day it’s a nice bag and the cycle continues. You end up spending so much on things you didn’t need. I resolved to identify needs, plan for them and solve them on the availability of resources. Need two pairs of flat shoes? Well, I should slot them on the following month's budget.

Transactional Costs – Every time you fuel or send money using mobile money, the transactional costs are too minimal that we often ignore. Upon accumulating them for a month, the total figure was shocking. I resolved to send money directly from my bank account or pay in cash to get rid of transactional costs.

Soft Loans – Soft loans come at an interest and that is an expenditure we incur without realizing. The deeper you are into soft loans the more you pay on interest. Some loan apps charge interest up to 15% of the principal per month. I resolved not to borrow any soft loans that charge an interest.

Contributions – Baby showers, birthdays, graduations, medical bills, funerals, church projects Etc. are never within our budget. They come as spontaneous needs that we need to oblige. I resolved to make a provision for the same every month and not to contribute a penny more above the budget.

Brand Slave – I am a brand shopper. E.g I only use a specific diaper brand even though it costs twice as much as normal brands with the same performance. I only use specific toiletries and kitchen brands. I discovered that I could save up to 20% of the total shopping costs if I used different brands without compromising on the quality.

Lack of Separate Emergency Savings – Now and then we run into a financial emergency. If we depend on our monthly earnings to sort it out, then we will end up going into debt which may be hard to recover. I resolved to open a separate savings account that I can always turn into in case I am stuck.

Peer Pressure – My friends know all the best joints in town. I feel left out sometimes, having wanted to always fit in a clique. Every time I got a call to meet them somewhere, I would have to raise money even if it meant borrowing. I have since learnt how to say NO! and I only show up to where, and when I can afford it.

If you employ the above strategies and are still broke, maybe it’s time to get another source of income. Check the next article on 'To invest or to save.’

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