By Justine Nyachieo
Despite many efforts to beef up your income and slim down expenses, you are still somehow broke. You have always wanted to regain your financial freedom but that so far looks like mission impossible. What could be going wrong?
Why are you always broke?
(1) You Are Caught Up In the Gambling Craze
Whether it is sports betting, lotto, pyramid schemes or hot-shot business ideas that promise to bloat your bank account overnight, too many of us fall for scams that promise extraordinary return on investment. Unfortunately, 95% of those who pursue wheeler-dealer deals lose.
The other 5% that wins comprises a few lucky fellows who are being fattened in readiness for the guillotines. In the end, the poor man continues to lose his hard-earned money and the cycle of poverty reigns supreme.
So, unless you’re a ponzi master or the so-called “betting experts” don’t gamble with your money. Pursue real, tangible investments instead. And if you must gamble, only spend what you can afford to lose.
(2) You Save but Other Needs Arise and You’re Forced to Withdraw the Cash against Your Will
Yes you are disciplined, you don’t like to misuse cash and you work hard like everyone else. When you get some money, you save some and spend some.
But a few days later, other unforeseen expenses come up and you have to empty your coffers with the promise (false promise) that you will replenish the account. Unfortunately the cycle continues month to month.
In that case it’s either you are living beyond your means or you have too much access to your money. To avoid this, try to find some side hustles that can help you create multiple streams of income.
At the same time, try to keep your money in a fixed deposit account or SACCO where the process of accessing it is a bit more complicated. Develop a financial plan and stick to it no matter the situation you encounter.
(3) You Don’t Know Where Your Money Is Going
You get your salary, plan for it off head and decide that you are going to have just a “little bit” of fun, clear some debts here and there, drink one for the road and maybe save the rest. But unfortunately, at the end of the day you realize that what you are left with is barely enough to run you till the end of the month.
Sometimes you even have to go for a salary advance or hop about for an M-shwari soft loan.
So where does all the money go?
First and foremost, this is an indicator that you are probably biting more than you can chew. Secondly, you don’t budget well for your money and even if you budget you don’t stick to the initial plan.
This is a case of lack of financial discipline. So start by inculcating some discipline, or else you will live to tell tales of how your friends succeeded while your money mysteriously melted from your pockets.
(4) You Invest In Depreciating Assets
Easy, I am not telling you to be a miser and ditch your expensive phone for a kabambe. Neither I’m I telling you to use matatus for the rest of your life because buying a car is not the best way to spend money.
What I am trying to say is if you invest your money entirely in things that lose value over time e.g. fancy furniture, phones, clothes, electronics and cars then you will always be broke. Take stock of the things you own today – do your flossets exceed your assets? Try to achieve some balance.
For every 1 flosset you buy, try to back it up with an asset that gains value over time. If it’s buying a car, make an effort to get a piece of land of similar amount somewhere. If it is investing in an expensive phone, consider buying some unit trusts on the side.
In order to avoid being broke today or in the future, you must always obey this delicate balance.
(5) Poverty Is In Your DNA
In most cases poverty is not a one-man problem… It is a generational issue. One of the most likely reasons why you are always broke is that your parents made decisions a long time ago that were not aligned to their (and your) future financial needs.
So today, by default, you have to pay for those mistakes… and if you are not careful you will end up handing over the baton of poverty to your children as well and the cycle will continue.
So instead of waiting for the situation to miraculously improve, perhaps it’s time you start making some conscious decisions in your life in a forward-thinking manner.
Break the rules, implement some radical measures and most importantly stop focusing only on your immediate pleasures. Poverty is in your DNA and you need to flush it off your life through a radical surgery.
Take-Home
And the list of reasons why you are always broke goes on and on. Remember, you are free to make whatever choices you want, but you are not free from the consequences of the choices.
Justine Nyachieo is a
Business Man & Mentor
+254742304047