8 Ways To Go Broke In Under A Year

How To Go Broke

       Crazy to consider, isn’t it? I’m sure we can all think of quite a few ways to go broke in under a year. A vacation in the Bahamas, anyone? Or maybe taking our kids for a week long stay at the Disneyland resort, staying at one of their fancy themed hotels with the character interactions. Wouldn’t the kids love that? 

       Sorry to say, that isn’t the point of this post. It’s easy enough to lose money, but what about saving money? Isn’t that what this whole business is about? Yes it is. Okay, then where am I going with this? This post explains how easy it is to go broke… without even realizing it. 

      While you would think that if we’re going broke anyway on spending money, you would prefer it be because of some fun outing, unfortunately, that’s not often the case. Some of it can be things like going grocery shopping. We all know that those have gotten far more expensive lately. But overall, it’s a case of spending money here and there a lot over time. I’ll give some examples. 

1. Eating Out

     I know, why did I have to put that down? Come on! I can’t eat out anymore? I didn’t say that. But if you do that too often, even if you’re getting cheap meals; that still adds up quite quickly. It’s the same thing as the “$5 Coffee Advice” you hear so often. “If you stop buying $5 coffees everyday, you can buy a house in no time.” Well, not quite. But the principle of it has a lot of valuable information.

Think about it; five dollars a week is thirty-five dollars, times fifty-two weeks in a year is $1,820. Not enough for a down payment on a house, (unless you have incredible credit and have some serious favors that you can call in…) but what an investment you could put in the stock market, or towards paying off debts. This is the same principle.

If you eat out let’s just say once a week… at least where I live, family restaurant prices cost about $16 for a meal on average. It’s just sixteen bucks right? Not a big deal. And you get to enjoy an outing with friends or family. Okay, but in a single year, that’s spending $832. And that’s for a single person. What if you are married and there’s two of you? What if you’re a family of four? Then you’re spending $3,320 a year on eating out. That’s only if you eat out once a week. What about twice a week? Then that’s $6,640 a year. Do you see what I mean? It adds up. 

2. Shopping

       Yes, I went there. Sorry, but it needed to be said. If you go shopping for clothes or shoes, or purses or whatever suits your fancy all the time, you already know that adds up. In my book “Your Sinple Guide To Money Mastery”, I cover how companies use manipulation tactics to trick you into spending more, while making you think you’re saving money. It’s very cleverly done I have to admit, but it bears thinking about all the same.

It’s one thing if you need new clothes, but if you’re going shopping for a social gathering all the time, and you’re spending money on things you don’t need, that’s a really quick way to go broke. I’m not immune to this either. I may not be a fashionable woman, but I am a fitness nut and a book dragon. (Can we make that a thing? Because bookworm is so ridiculous. I think book dragon sounds so much more sophisticated and powerful. 😉) I get drawn in like everyone else when there’s a book sale or a fitness equipment sale. (And I love me some Orgain Protein Powder.) 

3. Leasing Vehicles

       This is a really easy way to spend money that you wouldn’t even think of. I know there are benefits to leasing a vehicle, but in my personal opinion, they in no way outweight the cons. Leasing a vehicle is expensive and you never own the vehicle. I’d rather own mine. Then, once it’s paid off… it’s paid off. No more paying a subscription fee, (excuse me) monthly payment, on a vehicle that you will never own. This is a huge hit on your wallet and in your pocket.

Don’t lease vehicles, buy vehicles. If it’s too expensive, buy a used one. That’s what I did. The minivan that I drive my kids in is used. Sure, I bought a nice, used one. But that’s because I could afford it. It’s just as reliable as a new one. 

4. High-Interest Rates On Credit Cards & Loans

      Yes, this is a big one. If you have a credit card with a really high interest rate, then it might be best to switch to a different one. If you have a loan with a high interest rate, then it might be time to try to refinance it with a lower interest rate if you can. If that doesn’t work because of a poor credit score, then you need to bring that up. I explain how to do that in “What Is A Credit Score, And Why Do I Need One?” Check it out for further information there. 

5. Buying Impulsively

      I know, I just mentioned that companies know how to market so they trick you into buying. But that doesn’t change that if you go online and see an advertisement and get excited and buy something, that’s a hit on your wallet. My mindset with spending money online is this: If I really think that I want that item, I wait. I don’t purchase from the link right then. I wait. I can always go to their website later, or see if the product is on Amazon. If enough hours have passed that the “buy now” adrenaline rush is gone, I have the money to buy it, and I’m still interested in the product, then perhaps I will.

       But companies are clever with their countdown clocks. “You only have one day and six hours to buy it! Don’t wait!” Sound familiar? Yeah, me too. Don’t fall for it. Some of these companies, it. is genuine. If there’s something like limited seats or whatever.

But, I have seen that same marketing trick far too many times to know it’s just a trick. Even some of the business books I’ve read have taught that that’s a good idea. Often, it’s just a trick. They “limit” the amount of sales they can make, take it down for a day or two, and then put it right back up with another timer countdown. Don’t fall for it. You’re stronger than they are. Remind yourself of it. 

6. Get Rich Quick Schemes

       Yeah, that’s a big one. If you invest in something that isn’t legitimate and is labeled “Get Rich Quick”, then it’s a real good way to lose your money. Just because “Lucky Linda” didn’t lose her money and made a fortune on it, doesn’t mean that it’s legitimate. I’ve said before, there are not “Get Rich Quick” paths that work. The majority of them are a huge scam. And if you do happen to win the lottery by some insane chance, you’re wrapped up in all kinds of legal fees and contract agreements.

Plus, the majority of people who do win the lottery or gain a large inheritance from a family member; lose it in no time. They don’t know how to save that money for the future. They just spend it impulsively and are back where they started insanely quickly. Half the time they can’t even remember everything they spent their money on. So stay away from any “Get Rich Quick Schemes.” 

7. Gambling 

        Do I need to explain this one? 

8. Maintenance

       Perhaps I should say “A lack of maintenance.” If you don’t maintain your car, home, and property, that can lead to significant costs later on. Instead of raking up a small layer of leaves every year, you put it off until you get fined by the county and now you have to take care of years worth of work, or pay someone else to do it. (That won’t come cheap either.) Or if something breaks in your house and you choose not to fix it, that could lead to other problems. So keep your household, property and vehicle maintenance up. 

       There are certainly plenty of other ways to go broke as well. But those are common ways that people don’t even think about. It’s important to be vigilant with your money. You pay a high price for it… your time. That’s something we can’t get back. It really puts into context how wisely you should spend your money, doesn’t it? For more ways how to save money; you can go here: https://silveroakfinance.com/save-money-quickly/

You can also get more information in my book: “Your Simple Guide To Money Mastery”: https://a.co/d/jjzG6jD

       Please leave a comment, subscribe to the newsletter, and let me know if you have any questions. I’d love to get to know you better and help you with understanding money far more simply.