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Stuck Being Broke? Here’s How to Fix It

Posted on March 15th, 2024
Stuck Being Broke

Do you ever feel like you’re swimming upstream against your financial current? You are not the only one who feels this way.

As of July 2023 — sixty-one percent of consumers were living paycheck to paycheck, according to the New Reality Check: The Paycheck-to-Paycheck Report. In addition, 64 million Americans have debts that are in collections. Due to being stuck in the cycle of living paycheck to paycheck, there is little room for savings, breathing room, or achieving financial goals.

The good news is that you can break free of the “broke” cycle with actionable steps and the right mindset.

Acknowledge and Accept Your Reality

Denial can be extremely powerful. However, it won’t improve your financial situation.

So, let’s acknowledge the current situation as our first step. In most cases, this means tracking your income and expenditures. To make the process less intimidating, ask yourself:

  • Where is your money going? Keep a meticulous record of your expenses for a month to identify areas of improvement and leakage.
  • Do you have hidden debt? Student loans, credit card debt, and unpaid bills can silently consume the bulk of your income.
  • Are you living beyond your means? If so, adjust your lifestyle based on your income.

Most importantly, be honest with yourself about where you spend your money. Self-awareness is essential to making informed financial decisions in the future.

A Budget is Non-Negotiable

For a lot of people, budget is a filthy word. However, your budget is your guide to financial freedom. So, it’s kind of a big deal.

Here are some tips for building a budget if you don’t have one:

  • Track your income. You should include your salary, any side hustles, and any other sources of income you may have.
  • Categorize your expenses. Expenses can be fixed (rent, utilities) or variable (groceries, entertainment).
  • Allocate your income. Fixed expenses should be deducted first, followed by debt payments and savings.
  • Leave room for flexibility. Don’t forget to budget for unforeseen expenses and occasional indulgences.
  • Track your progress. Keep a regular eye on your spending and adjust your budget as necessary.

That wasn’t painful — was it? You can also use budgeting apps like YNAB or spreadsheets to categorize income and expenses.

Your budget doesn’t have to be complicated.

Ultimately, budgets should include all your needs and some wants, as well as savings for emergencies and the future. A budgeting plan, envelope system, and zero-based budget can accomplish this.

Alternatively, you can use the popular 50/30/20 budget to make the most of your money. Here’s how it works:

  • Approximately half of your after-tax income is spent on necessities, including debt payments.
  • A maximum of 30% of the budget goes to wants.
  • At least 20% goes to savings and extra debt payments.

People like this plan because of its simplicity. Additionally, following these guidelines will enable people to manage debt, indulge occasionally, and save enough to pay for irregular or unexpected expenses and retire comfortably.

Identify the Leaks in Your Budget

When you clearly know what you spend and earn, identify areas where you can cut back. Perhaps it’s Friday nights out with friends or impulse purchases online. Maybe you overpay for subscriptions or don’t negotiate your bills.

Regardless, every little leak adds up, so ensure they are plugged. Here are some suggestions to help you get started:

  • Cook more meals at home. The cost of eating out is one of the biggest drains on your budget. According to Journey Foods, home-cooked meals cost $4.31 on average per serving, whereas eating out costs $20.37.
  • Unsubscribe from unused subscriptions. If you don’t actively use anything on your bank statements, cancel it. Alternatively, you can use a tool like Trim. The app tracks your spending and identifies recurring transactions. An alert will then ask you if you want to cancel. If so — time will handle this for you.
  • Negotiate bills. Don’t be afraid to ask for better rates from your service providers. You should even do the same for credit card rates. Or, if you prefer, you can submit a photo or copy of your bills to let a BillShark agent negotiate on your behalf.
  • Shop around for better deals. Before making any purchases, be sure to compare prices and take advantage of coupons and discount codes.
  • Challenge impulse buys. Before making non-essential purchases, wait 24 hours.

ShiftYour Mindset

The key to financial stability is not just numbers; it’s a mentality. So, cultivate a positive attitude and be proactive. Also, remember that progress takes time and effort. To stay motivated, though, celebrate your small victories.

Additionally, here are three mindsets that you should work on shifting.

  • Scarcity to abundance. Do not focus on what you lack. Instead, cultivate gratitude for what you have and believe in your ability to create more.
  • Instant gratification to delayed satisfaction. Prioritize long-term goals over short-term desires. In other words, work on delaying gratification.
  • Victim to Victor. Rather than blaming others for your financial situation, take responsibility for it. Keep in mind that you are in control!

Increase Your Income Stream (If Possible)

Reducing expenses is essential, but increasing income can make a significant difference. Here are some options to consider:

  • Ask for a raise. Present your employer with a compelling case based on your research. For example, you can highlight your accompaniments or get salary comparisons from Glassdoor and Payscale.
  • Take on a side hustle. You can make extra money by freelancing, running an online business, or even pet-sitting if you have the time.
  • Sell unused items. Get rid of the clutter in your home and turn your unwanted items into cash through online marketplaces or garage sales.
  • Upskill yourself. Learning new skills can make you more valuable in the job market.

Build an Emergency Fund

We all face unexpected expenses from time to time. However, you can prevent them from derailing your progress by having an emergency fund.

You should aim for 3-6 months’ worth of living expenses for unexpected expenses. But, if that’s not possible, start small. For example, you can put aside $20 a week and gradually build up a cushion to cover unexpected expenses.

Manage Debt Strategically

It’s no secret that debt can be a burden. Fortunately, strategic management is capable of alleviating this problem:

  • Prioritize high-interest debt. Prioritize paying off debts with the highest interest rates.
  • Consolidate your debt: Consolidating multiple debts into one may lower your interest rates and simplify repayment. Check out options like Upgrade, SoFi’s debt consolidation loan, LightStream, or Happy Money.
  • Negotiate repayment plans. As previously mentioned, you can discuss lower interest rates or flexible repayment options with your creditors.
  • Avoid new debt. Rather than spending impulsively or using credit cards unnecessarily, resist the temptation.

Saving More, Spending Less

Depending on your individual circumstances and spending habits, there are many ways to reach this goal. You can, however, try these general tips:

Reducing your spending.

  • Embrace minimalism. Take steps to reduce your dependence on material possessions.
  • Challenge yourself with a no-spend period. Take a moment to reset your spending habits and appreciate the things you already own.
  • Embrace free activities. You can find free entertainment in parks, libraries, museums, and other places.
  • Find cheaper alternatives. Look for cheaper alternatives whenever you buy household items, groceries, or entertainment. Saving money doesn’t have to mean sacrificing quality.
  • Learn to say no. Don’t feel obligated to buy things you don’t need or want.
  • Educate yourself. Learn about financial literacy through books, podcasts, and other free resources like blogs and YouTube.

Increasing your savings.

  • Set realistic savings goals. As you get comfortable, increase your savings gradually. The more specific your goals are, the more motivated you will be.
  • Automate your savings. Create an automatic transfer from your checking account to your savings account every payday. This approach will ensure that you are consistently saving money.
  • Consider high-yield savings accounts. If you want to maximize your return on savings, consider accounts with higher interest rates.
  • Explore other savings options. Take advantage of tax benefits and compound interest over time by investing in retirement accounts such as IRAs or 401(k)s.
  • Invest regularly. Stash offers a Smart Portfolio, a personal brokerage account, and a retirement account for just $3 per month.

Seek Help and Support

Finally, it’s okay to ask for help. There are numerous resources to assist you in getting your finances in order. Take into consideration


Financial transformation is not something that happens overnight. So be patient, celebrate small victories, and never give up.

If you follow these actionable steps, you can eventually break free from the “broke” cycle and build a financially secure and fulfilling future for yourself.

[Related: What to do When You’re Completely Broke]


What’s the first step to get out of debt?

In order to move forward, you need to assess your finances and acknowledge your situation. Tracking your income and expenses for at least a month can help you understand where your money goes. This will help you identify areas where you can cut back and free up more money.

I’m drowning in debt! What should I do?

Different debt repayment methods may be appropriate depending on your situation. Consider the following:

  • Debt snowball. To gain momentum and feel motivated, pay off the smallest debts first.
  • Debt avalanche. To save money in the long run, prioritize debts with the highest interest rates.
  • Consolidating debt. Reduce the interest rate on multiple debts by combining them into one loan.
  • Seek professional help. For personalized advice, talk to a credit counselor or financial advisor.

I barely make ends meet. How can I save money?

It doesn’t matter how small the changes are; they can make a huge impact. Listed below are some ideas:

  • Create a budget. Budget your income for essential expenses, debt repayment, and savings.
  • Reduce expenses. Shopping around lets you find cheaper alternatives to groceries, subscriptions, and entertainment.
  • Cook more at home. Eating out is expensive. Prepare healthier and cheaper meals at home.
  • Shop around. Compare prices before you buy anything, and consider used or discounted items as well.
  • Boost your income. Think about side hustles and other ways to increase your income.

I feel discouraged and don’t know where to start.

Keep in mind that progress takes time. You should start small, celebrate your wins, and seek support whenever needed. The following resources may be helpful:

  • National Foundation for Credit Counseling
  • Consumer Financial Protection Bureau
  • Libraries often offer workshops and resources related to financial literacy.

What if I have unique circumstances?

There is no one-size-fits-all solution. However, look for resources and programs tailored to your financial challenges, such as medical debt, student loans, or childcare costs.

The good news is that you can get out of debt and improve your financial situation. Keep your focus, be patient, and seek help whenever needed.

Image Credit: Nicola Barts; Pexels

John Rampton

John Rampton

John Rampton is an entrepreneur and connector. When he was 23 years old, while attending the University of Utah, he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months, he had several surgeries, stem cell injections and learned how to walk again. During this time, he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time. He is the Founder and CEO of Due.

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.


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