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7 reasons you're broke

When you end up broke, you're forced to do things you wouldn't normally do.

By MSN Money Partner Jun 22, 2012 8:51AM

This guest post comes from Andrea Whitmer at So Over Debt.

Image: Woman with paperwork (© Big Cheese Photo/Jupiterimages)Recently I made a super-late trip to the grocery store (you know, because Wal-Mart is pretty empty at midnight) and I left there ready to strangle someone. Not because of what my groceries cost -- I spent only $100 -- but because of a fellow shopper.

First of all, this lady had her obviously school-age child in Wal-Mart at midnight. There was still a week of school left. Now, there might have been a good reason for that, so I really tried not to judge her. But that didn't last too long. I passed her several times on my quest to buy real food, and at one point her daughter gestured toward me while I was putting a bag of apples in my cart.

"Mom, I want some apples!" she said.

The lady snapped at her, "You're not getting apples! I don't know why you think I'm made of money!"

Oh, hell to the no. Commence Super Andrea Judge Mode. I looked in her cart, and what did she have? A couple of shirts, three or four DVDs, and some random grocery items. And no matter how hard I tried, I couldn't come up with a single scenario where it's OK to buy movies and tell your child she can't have apples. Unless I'm missing something, that woman was either really mean or really broke. Or maybe both.

I don't know much about being mean, but I'm an expert at being broke. Thankfully, I've never deprived my son of things like fruit, but that situation got me thinking about the things I have done (or done without) due to lack of funds. Then I started thinking about why people end up broke in the first place. I came up with all kinds of reasons why someone's pockets may be empty. Here are seven of them:

1. You don't have enough income to meet your expenses.

Been there, done that. Sometimes no matter how much you cut, you just can't juggle all your responsibilities on the amount of money you have coming in. This is the part where I'm supposed to tell you to get another job or go back to school, but I'll be honest: Now is not a great time to do either of those things. So instead I'll just tell you I know it sucks and I'm sorry. Reduce expenses as much as you can, and don't be ashamed to ask for help if you need it. Especially if your kids want apples! (Post continues below video.)

2. You spend too much money on junk.

If spending could go on a résumé, mine would be the size of a phone book. So please know that I'm not being condescending when I say that you have two choices: Either you can stop spending or you can continue being broke. Getting over my spending addiction was one of the best things I ever did, but no one could convince me to do it. I had to make that decision myself. And it came when I was tired -- really tired -- of being broke.

3. You have a serious health problem, a sick family member or some other unfortunate circumstance.

It's unfortunate that because we live in America, something like medical treatment can leave us bankrupt. But for now, that's the way it works. If you're broke because of a natural disaster or your spouse's untimely death, you have my sympathy and you will receive no judgment from me. Just do the best you can.

4. You give away all your money.

Ever meet one of those people who is generous to a fault? She's paying her sister's electric bill, taking care of her friends' library fees, picking up her grandma's prescriptions and cooking meals for her neighbors. Oh, and she faithfully donates money to charities and/or her church. Yet her bills aren't paid on time and she frequently goes without the things she needs. If you're one of those people, STOP BEING A LUNATIC. There's a reason why all the finance people harp on paying yourself first. Helping others is great, but only when your own bills are paid.

5. You don't plan ahead.

Emergency funds are all the rage right now, but have you ever considered why? Because stuff happens. When you have a savings account full of money, you can usually deal with said stuff pretty easily. But when you don't, you end up using a credit card, borrowing money or going without. You absolutely must start saving, even if it's $10 a month. Saving is contageous; try it out!

6. Your priorities are screwed up.

True story: My friend's mom hasn't had air conditioning at her house in almost three years. We live in the South, where you can seriously DIE in a house with no air conditioning. It's not optional. Yet my friend's mom has been surviving without it somehow, all while taking at least two vacations a year. If you ask about the AC unit, she sighs, "We just can't afford to get it fixed right now." If you're doing crazy things like that to afford things like vacations, I don't even know what to tell you.

7. You simply don't know where your money goes. Or you're afraid to find out.

When I took over my cousin's finances in February, I was flabbergasted to see how much money he spent on late fees, overdraft fees and random stuff that he didn't even remember buying. Since he makes more in six months than I've ever made in a year, it just didn't make sense that he would be broke. But because of his failure to pay attention to little things like his bank balance and the due dates of his bills, he barely had a dollar to his name. Luckily he'll be coming home to a nice cushion of cash. 

The bottom line

When you do any of the things I mentioned, you end up broke. When you end up broke, you're forced to do things you wouldn't normally do. When you're forced to do things you wouldn't normally do, you buy DVDs instead of letting your child have apples. Don't buy DVDs instead of letting your child have apples.

Are you (or have you ever been) broke for any of the reasons I listed? Any other reasons you can think of why people don't have any money? Am I the only one who wanted to punch the grocery store lady in the jaw?

More from So Over Debt and MSN Money:

Jun 22, 2012 12:13PM

I have done a couple of things to get me on a schedule.

1. Get a small Emergency fund intially....bout $500-1500 to start. then get it to at least 3 months expenses.

2. set up a savings account in a different city at least 50 miles away...with NO ATM acesss

3. Started paying myself first,into that Saving Account in a differenct city...$100/paycheck....Had $2600 in a year. put at least 1/2 of my annual bonus in their also.

4. every raise for over 10 years went to the saving account or to the retirement fund.

5. Got on a took more than 6 months to get it refined but it works.

6. paid off credit cards completely, got rid of all of them but ONE used it for travel only.

7. Paid off my cars. and kept them for over 250K. took 1/2 of the payment when paid off and set aside for another a separate saving account. Then I bought only used cars with around 60K miles on them.

8. bought a house that was only 60% of my gross salary...It was a foreclosure. I have never bought a house that was more than 2 times my total gross salary.


I live in a rural area. I saw a brand new Cadilac Escalade in a driveway of a house that was only 6-800 sq ft. the Escalade cost more than the house! The people who lived there complained that they never had any extra money.....GO figure!!!

I've been in the Lending & Collecting side of personal finance for about 25 years.  I can assure you that in this country poverty is a lifestyle choice.  As a former military officer I've been overseas where they have real poverty, not caused by one's lifestyle.  Here, the number of people I deal with who are poor solely because of outside circumstances is incredibly small.  Examples:  (1) I lost everything in a fire -- Did you have fire insurance?  No.  (2) I lost my $20/hour job and I've been unemployed for two years -- Did you ever apply for  a $10/hr job and rely on your experience to get promoted rapidly?  No.  (3) Do you spend a lot of time at a casino?  Yes.  (4) Do you borrow from payday lenders at ruinous interest rates?  Yes.  (5) Did I see your name in the newspaper last week because you were arrested for DUI?  Yes.  (6) Are you paying child support to three different women for four different kids?  Yes.  (7) Have you done anything to improve your job skills?  No.  (8) Are you stuck at home caring for kids by three different fathers?  Yes.  Every one of those eight examples are related to lifestyle -- from refusing to buy insurance, to blowing money gambling or drinking, to having irresponsible sex.  So many people want to blame others instead of looking in the mirror.   
Jun 22, 2012 2:34PM

I curb spending by figuring out how many hours I must work to pay for an item, tempered with how well I like my job (or not).  First I calculated my spending money by dividing my take-home pay by the numbers of work hours.  (Don’t use Gross pay – use the amount left after taxes and all other deductions are taken out.)   Then I divide the price of the item by my take-home hourly rate, to find how many hours I must work to pay for it.  Don’t forget to add taxes to the cost of the item, and also interest if you’ll charge it to a credit card that you won’t pay off. 


As an example, I used buy lots of music CDs.  When I calculated my take-home pay I was making about $10 per hour.  The average cost of a CD was $15, so I needed to work one and one-half hours to earn the money to pay for one CD.  That made me think harder about whether I really liked the artist enough to warrant working that long.  I still buy music CDs but not so many.


Another way to look at this is to figure out how much spending money I really had after necessities (rent, utilities, taxes, insurance, basic foods, emergency savings account, etc.) were paid.  Then when I considered buying something I could compare its cost to the spending money I had on hand.  I can decide if the item is worth enough to me to deplete my spending money, and how many paychecks I’d need to pay the bill off.  The bottom line is these calculations helped me realize how well I could afford things, and how much I had to work to pay for them.


Whatever you do, don’t allow a salesman to trick you into thinking that you can afford something because it only costs x dollars per month.  His math probably hides the length of time you’ll be paying, and therefore how long your ability to purchase other things is hampered.

Jun 22, 2012 2:07PM
#6 above hit home. A friend of mine has a buddy that has a 3500sf 20 year old house with no heat. We live in the north east and the furnace broke 3 years ago and he cant find the money to fix it. In that time he has sold $100K worth of land and got two insurance claims totaling $12K. Where does the money go? How about 3 cars, a John Deere tractor, a motor home and a hot tub and Im sure that is just the big stuff in his quest for stuff. He's also gone to jail (third DUI) and has lawyer and court fees are still not paid... thus does not have his drivers license... the rumor is he still drives. Thats a spending problem with a side of train wreck.
NEED and WANT......................figure out the real difference and live with, don't deny that reality and your ability to earn!

BTW, Thumbs down on a statement such as this can only mean (brattiest little girl voice) : "I don't want to consider before spending and you can't make me"!..To which I reply, you and anyone else is welcome to jacuzzi in their own feces anytime you like...............LOL!
Jun 22, 2012 4:48PM
Get rid of your cable and smartphone.  Don't go on vacation.  You can't afford them.  The dollar you make today is more valuable than the one you make in 5 years because it has the most time to grow.  Use that to your advantage and save.
Jun 22, 2012 1:46PM
fight the social pressure to spend.  everyone everywhere is trying to sell you something. 
Jun 22, 2012 2:51PM

NEED VS WANT. Definitely. You don't need to deprive yourself if you have the cushion for it, but don't go overboard and use ALL of that cushion.

I grew up broke. My mom was a single mother of 3 and got no child support. So I have always tried to be REALLY good about spending, I get bad anxiety when our bank account is low. But while I can say we are doing better and getting on track... At first it was really hard to be really good about spending when my husband got a new job.. we had both grown up with nothing and decided we deserved nice things. So instead of paying off the debt we accrued before he got the new job, we spent too much on way too many things. It only took a year to take its toll and we finally got our debt paid way down and are able to start saving for a house.

Jun 22, 2012 4:18PM

LOL, air conditioning in the South is not optional?  In whose opinion?  People lived in the South for centuries before air conditioning was invented and became widely available.  There may be many examples of screwed up priorities in this world but they are not always that easy to identify.  The whole point of priorities is that everyone's are different.  If you live in the South and are not bothered by the heat and would rather spend your money on vacations then on your electricity bill more power to you.

Jun 22, 2012 2:08PM

if you are lucky enough to have health incsurance...understand the policy. As a single mother, I was devasted (emotionally & financially) to learn that my hearing-impaired child wold not be covered for anything "hearing related." Exams, audiograms, surgical procedures, hearing aids...even a simple ear infection... all come under "hearing related - non-policy." In one year I went from a significant savings to have 10K in medical debt. Now we are cutting back on everytning just to pay the bills.

Jun 22, 2012 7:51PM
I can think of 2 reason's why I'm broke.....Hope & Change!!
Jun 25, 2012 10:30AM
Once again we are talking of wants and needs. You want air conditioning, you don't need air conditioning. I was born and raised in southwest Arkansas and never had air conditioning. Also I did not have air conditioning during my school years, which includes 2 years in a college dorm. I joined the Navy and my first station after boot camp was Norman, OK. for 2 months, June and July. I lived in the barracks with no air conditioning. Then on to Memphis, TN, August - April. I also lived in the barracks with no air conditioning. The barracks were heated, heat is a need. After Memphis, I got married and was transferred to Pensacola, FL. We lived in Pensacola for 3 years (1960 - 1963) without air conditioning What really upsets me now it to see all low rent/no rent public housing in my area air conditioned and some with exercise room and pools.
Jun 25, 2012 3:42PM
Health Insurance premiums+10%/year. Utilities+5-7%/yr. Groceries+5-7%/yr. Gas+20%/yr. 
Taxes+20%/yr Savings1/4%/yr. Investments+3-7%/yr

We all have to do more with less. Get used to it, there's no end in sight. Most folks I know have a side-job to their side-job. 
We are cutting out every expense we can and prioritizing our wants. Can't think of another way to say it.
Jun 22, 2012 4:56PM
How about gas prices are too high...what propaganda from these lib-tards.
Jun 22, 2012 7:57PM

There is definitely the need vs the wants in importance and priorities.  The only thing I can say is that low wages everywhere you go, whether you have the "job skills" or not is what keeps people in poverty.  Stagnant wages for the last 30-40 years is the biggest contributing factor to people being broke.  There is no such thing as promotion anymore.  Sure, the employee can take on more responsibility and more training, but is there a raise with that, NO.  My husband has been certified on various equipment and is the only certified trainer on one piece of equipment in the country for his company and NO raise for that.  The average working person is struggling because the cost of everything is up and wages are flat or going down.


And for those who opt for Internet, cable TV, a smartphone (likely a pay-by-the-month), purchasing the non-essentials, are likely the same people who windowshop for months or years at a time and never get anything and get sick of dreaming.  Window shopping at the grocery store is the worst.  To walk by the meat department or the fresh produce department and comment to your spouse who a nice steak would be so great or to afford a fresh watermelon for a summer picnic would taste so good but you never get one.  To never get the chance to buy a new movie or a cd for years at a time leaves the wish list growing ever so longer.  It gets old seeing others around you with a new car that never breaks down, going to the movie theatre, having nice things.  Things you can never afford to have or do.  A family vacation--what is that?  I am 38 and have still never had one.  Sometimes, a person gets sick of doing the right thing, going without to be responsible and decides--they are going to splurge and make themselves happy for a little while.


Can't pass judgement unless you have been there.

Apr 7, 2014 2:34PM
So, if one is foolish with money and makes bad decisions, they won't get rich?! Who knew??!! :) 
If you have money issues, I would try and cut out whatever expenses you have and don't need... or at least minimize expenses. I would first check out insurance costs (especially car insurance)... they are massive drains on your pocket. Look to bring your payments down to around $25/month (check Insurance Panda for this). I would also try to minimize gas costs with the GasBuddy app. Once you finally get your spending under control, you'll realize that you can start paying off your debt FAST. (or you could save it)
Jun 22, 2012 2:07PM
The biggest reason I am broke is no money. Actually I am not broke I get a decent military retirement, work a 40 + hour week and made some sound investments in the past that are now paying off. If I had to count on Social Security I would be living in a refrigerator box in the woods.
Jun 22, 2012 8:51PM

Andrea, going to your blog and looking over articles from the past month, I found this little pearl:


"But no one knows the life situation of every single person on the planet, no matter how much they think they do."


You should really take your own advice...and mind your own damn business.

Jun 22, 2012 5:27PM
There's a reason I call people like this author libtards. While some of her points may have some merit, the attitude is ghastly and awful.

First, one's priorities are not anyone else's. Did this arrogant author consider that perhaps the woman in Walmart may have had other fruit at home and that perhaps she needed those shirts and the DVDs may have been for gifts? What a judgemental ****!

Another example--my parents lived without air conditioning until the 1990s. IT IS NOT MANDATORY. Again, priorities. Perhaps what is spent on air conditioning to this family is a valuable trade-off in order to have some kind of vacation together. But oh no, our great and sanctimonious author of course had to pass judgement -- based on HER value system.

Authors like this hork me off.

Jun 22, 2012 6:47PM

Dear Andrea...this should be a lesson for you to mind your own bloody business. Maybe this is why you gals imagine that you "can't get ahead". What someone has in their cart is certainly none of your business, now, is it?


God, I do *not* want to live on this planet anymore.

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