The Prudent Life: 5 Reasons Why You Are Broke!

By Ijeoma Madueke

So you have a job, and it is a good one too. If you are being completely honest you would agree that you get paid pretty well, by industry standards. But somehow, it is the middle of the month and you are dry or even completely OUT of money! Your money just seems to evaporate, month in month out. Now it is the end of the year and you have no evidence that you actually worked at all.

I imagine that you are beyond frustrated – having nothing to show for your hard work can be depressing, shameful even. Perhaps you are so used to being broke that you don’t even notice anymore. After all, patterns are hard to break for a reason!

The average time it takes to form and stick to a new habit 66 days. In your case, this means over two-months of deliberate action. The good news? You are not alone. About 60% of workers live from paycheck to paycheck – let’s crunch some numbers. With a population of 180 million, labor force of 80 million and unemployment rate of 13.3%, you are looking at about 41 million individuals in the same boat. If misery loves company, then you should be having a block party.

Back to the matter, for almost every pattern there is an equal and opposite pattern – oh wait that’s supposed for forces but you get the point. If this is your story, you are probably prone to one or more of the following:

You Have No Idea What You Are Spending Your Money On
With how much we seem to track other things in life, the next season of our favourite show or the release of a new game, you would expect the same enthusiasm with something that should be fundamental; our finances. But somehow, we never seem to get the hang of it. Maybe the expenses come in too quick and at the same time. Maybe we do not think some costs are a ‘big deal’, but the truth is these things add up. Wise ones say, “Tiny drops of water make the mighty Ocean!” The real question is do you know what you spend your money on? Yes, you buy petrol for your car, lunch at work, pay to get your hair done and Oh! You took a few kids to get some ice cream. Do you really know how much you spend on each of these every month?

Your Money Is Too Accessible
Technology is good, great in fact. But with its many blessings, technology has sprinkled its fair share of woes. From in-Bank withdrawals, to ATM withdrawals, internet banking and now Mobile Banking Apps. Come on! Now our money is literally at our fingertips. The good ol’ days of leaving your Debit/Credit cards at home to avoid spending are gone. With a click, you can transfer and pay anyone for anything – necessity or splurge. How do you win the fight?

You Justify To Your Impulses
“It is my Cheat Day!” or “It is my birthday, I deserve this!” or “This is what I’m working hard for!” or “I can afford it!” Do any of these phrases sound familiar? The idea of rewarding ourselves for a job well done is human nature, the problem is the actual reward. Dieticians emphasize that rewarding healthy eating with an unhealthy cheat day is entirely psychological and in fact counter-productive to your regimen. For a few seconds of gratification, you undo weeks of hard work. Is the pleasure really worth the pain?

You Are Playing Catch Up
Not a fan of the whole “birds of the same feather” theory. Why? Because the diversity of circle I friends is in itself, the beauty of the friendship. The whole of doesn’t have to be the same – the beak, the claws, there is so much more that can draw you to your circle. This is all prelude to a larger point, so let us begin. Thanks to our insatiable list of ‘wants’ and also to social media – Instagram, Twitter, Snapchat and Fashion Blogs, we always want to live a certain way, go to certain places and be a certain way. It may not be pressure, maybe just be a misalignment with who you are and who you expected to be at this stage in life. No matter what the source, the end result is an overarching need to keep up. How do you deal with your expectations?

You Don’t Save
Last but certainly not the least is saving as you earn. I am guilty, had been for a while, I always said I would save when I started making ‘real money’. Now I want to yell at my 18-year old self for having nothing to show for four years of part time work. How much do you save you may ask? The answer is as much as you can. Let’s crunch some numbers! If I earned about $800 a month, and saved $100 (10%) a month, for 12 months over four years, a today’s rate, I would have had north of N2million sitting in my account which would have earned some interest. The point? It is never too early to start saving and mapping your route to financial freedom. What expenses can you cut out? Where can you save a little today?

Prudent Tip of the week: Track that dough like you’re baking bread!

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