“Broke” is a relative term. What one person considers to be broke may not be the same as what another person considers to be broke. However, there are some signs that indicate that you may be broke and in need of financial help. If any of the following signs apply to you, then you may be broke and not even know it!
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You Have More Month than Money
This is a common saying for a reason. If you find yourself constantly struggling to make ends meet at the end of the month, then chances are you’re broke. Living paycheck to paycheck is not indicative of a healthy financial situation.
You Rely on Credit Cards to Make Ends Meet
If you find yourself using your credit cards more often than not, it’s a sign that you’re struggling financially. Credit cards should only be used in case of emergency, not as a way to subsidize your income.
You Don’t Have Any Savings
Everyone should have some sort of savings account, even if it’s just a few hundred dollars. If you don’t have any savings whatsoever, then it’s time to start setting some money aside each month. Having no savings puts you at risk of being unable to cover unexpected expenses, such as car repairs or medical bills.
Your Debt Exceeds Your Assets
Take a look at your debts and compare them to your assets (things like your home equity or savings). If your debts are higher than your assets, then it’s time to start working on paying down that debt ASAP. A high debt-to-asset ratio is not sustainable in the long run and will only lead to more financial problems down the road.
You Can’t Stick to a Budget
Or you don’t have a budget at all! Budgets are essential for getting your finances in order. If you can’t seem to stick to a budget or don’t even have one, then it’s time to sit down and create one before things get out of control. Not sure where to start? Check out our blog post on creating a budget that works for you!
Final Thoughts
If any of the signs above resonate with you, then chances are you’re broke (or close to being broke). The good news is that there are steps you can take to get your finances back on track! Start by creating a budget and sticking to it; this will help you get a better handle on where your money is going each month. You should also focus on paying down any debt that you might have; this will help reduce your monthly expenses and give you some much-needed breathing room in your budget. Finally, make sure to set aside some money each month into savings; this will help tide you over in case of an unexpected expense or unforeseen circumstance. By following these simple steps, you can get your finances back on track and avoid being broke!
