“I’m going to be broke for the rest of my life.”

Someone said this to me the other day.  It was sad but also a little frustrating.  This person continuously makes bad choices and expects that somehow everything will work out fine anyway.

While there certainly are some people who struggle financially because of bad luck (a cancer diagnosis, a chronically ill child, etc.), most people can’t make ends meet for one simple reason.

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You don’t have a plan. 

Most Americans are not intentional with their money.  They spend more than they earn and they rely on credit cards to get by. Soon, they’re drowning in debt payments and they feel like they’ll always be broke.

If you aren’t a spender, maybe you don’t spend more than you earn.  Perhaps you break even each month.  It’s great that you aren’t relying on credit cards, but you still never have any extra money to save.

You’re living paycheck to paycheck, so you can never get ahead.

When you don’t have a plan, you have no idea where your money is going and you spend haphazardly.  This is a recipe for disaster.

How much money do you spend each month on your bills? Entertainment? Eating out? If you aren’t sure (or you only have a vague idea), it’s time to create a budget.

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You haven’t created a budget. 

There is a common misconception that budgets are constricting, but the opposite is actually true. A budget gives you freedom.

It gives you permission to spend and it allows you to see where your money is going. Instead of being controlled by your money, now you can control it.

Once you’ve regained control of your finances, you can start paying off debt, saving money, and getting your financial life together. This will help you to achieve financial freedom and finally reach your goals.

You’re not prepared for emergencies. 

Here’s a scary statistic: the average American can’t cover a $400 emergency without using a credit card.  Medical bills, car or home repairs, or other emergencies can easily cost much more than $400.

Dave Ramsey recommends setting aside $1,000 for emergencies while you’re still in debt.

This $1,000 keeps you from having to use credit cards. If your emergency costs more than $1,000, you can temporarily pause paying off debt while you cash flow the emergency. Once you’re debt-free, Dave suggests saving 3-6 months of expenses.

This will allow you to pay your bills in the event that you are laid off from your job or if you face a major emergency.  This money will give you peace of mind, and again, it’ll keep you from relying on credit cards and going back in debt.

You don’t save for big expenses. 

How did you prepare the last time you wanted to pay for a vacation or a new car?  Did you take out a loan or use a credit card?  What if you set aside a few hundred dollars each month instead and saved up for your big purchase?

The average car payment in the U.S. is nearly $400 per month, yet most Americans say they can’t afford to save a few hundred dollars each month.  Why not save $400 each month instead of paying it toward a loan?

You overspend. 

If you spend more than you earn, you’re going to end up in trouble financially. Living within your means is crucial if you want to stop feeling broke. Many people think that you need to spend money in order to have fun and enjoy life, but that simply isn’t true.

There are plenty of ways to have fun on a budget.

If you’re spending too much on things like groceries or online shopping, check out cash back websites and apps like Ibotta and Ebates. These sites are free to use and can help you to earn cash back on items you were going to purchase anyway.

You have nothing to lose and everything to gain!

Related: Ebates Review: How to Earn Cash Back for Online Shopping

You have too much debt.

Maybe you have a budget and a sizable emergency fund, but you still feel broke all the time because you’re drowning in debt.  I’ve been there.

When all of your income is being eaten up by debt payments, you feel broke all the time. The best way to fix this problem is to pay off your debt as quickly as possible.

To do this, you could try cutting back on major expenses (by downsizing to a smaller home, getting a roommate, buying a less expensive car, etc).

Perhaps you’d prefer to increase your income by picking up a side hustle (or two).  If it’s student loan debt you’re struggling with, you could try refinancing your student loans at a lower interest rate.

It doesn’t really matter which method you use. What matters is that you’re one step closer to becoming debt-free!

You don’t have to be broke forever.

If you have a plan and you follow through with it, you CAN do it!  Dave Ramsey’s seven step financial plan has helped millions of Americans to get out of debt. His book The Total Money Makeover completely changed my life.

You don’t have to be broke for the rest of your life.  Create a plan, set a budget (and stick to it), prepare for emergencies and large expenses, stop overspending, and start the debt snowball.