10 Money Myths That Are Keeping You Broke

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why am I always broke

Are you tired of struggling with money? If you find yourself asking “why am I always broke?” read on to discover some money myths you probably believe.

Being broke is not a life sentence. The reason you’re broke boils down to one main idea – you spend more money than you make.

And here are 10 money myths that are keeping you broke.

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Myth #1: You’re just not good with money

This is 100% a limiting belief. Otherwise known as a lie you tell yourself. You made it up, and you can do better. Yep, it’s a choice. Telling yourself that you’re not good with money lets you off the hook for taking care of your finances.

No one is born magically being ‘good with money.’ It’s completely YOUR responsibility to become good with money. Luckily, there are tons of awesome resources that make learning how to manage your money much easier.

Dave Ramsey is one of the very best financial teachers. I read his book, The Total Money Makeover5 years ago, and it changed my financial life. I highly recommend you read it, if you’re serious about learning to be good with money.

If reading books is totally not your thing, here is a link to his YouTube channel.

You don’t have to be broke forever.

You can change your trajectory today.

Start by telling yourself that you’re good with money.

Related: 5 things to do when you’re flat BROKE

why am I always broke

Myth #2: You need a credit card for emergencies

Nope! Credit cards are NOT a solution to emergencies. You know what is? An emergency fund. Having money set aside when something unfortunate happens is what will save you. You rescue yourself.

Credit cards exist so banks and financial institutions can make money off of you. Next time you feel flattered by a credit card offer, or proud when you get approved, don’t be. The banks aren’t doing you a favor. They want you to depend on them. That’s their business.

Credit cards give you a false sense of security. And they give you an excuse to not have an emergency fund.

Instead, start setting aside money from each paycheck to build your emergency fund. Use it only when you’re truly in a crunch.

Myth #3: You can’t afford to save money

In case you’re thinking you can’t afford to save money, welcome to myth #3. You can save money on any income. Actually, you can’t afford not to.

Since now you know that you pay more for everything when you use credit cards, and you know you need an emergency fund, it’s time to let go of the belief that you can’t save money.

I’m guessing that you spend money on things you technically shouldn’t be. Do you eat at restaurants, go to the movies or to concerts, smoke, drink a lot of alcohol, or hang out at Target? If so, you’re most definitely spending money that could be saved.

If you can honestly say you don’t have a single extra mismanaged penny, then it’s time to find a way to earn a little extra money. Here’s 21 side hustles you can start and make extra money that you can save.

Believing it can be done is always the first step.

Look for opportunities instead of excuses.

always broke before payday

Myth #4: You ‘deserve’ nice things

We are constantly being bombarded with messages that declare that we deserve to spend money on ourselves. We are being marketed to constantly! Nice things and deserving them have absolutely nothing to do with each other.

You don’t deserve to be broke and in debt. But you are doing it to yourself.

You know what you do deserve? Financial health and freedom. But buying all those ‘nice things’ aren’t going to get you there.

Do your future self a favor, and honor what you truly deserve.

Myth #5: Car payments are normal

Raise your hand if you have a car payment. It’s ok, it’s totally normal, right?

Yes, car loans are common, but that doesn’t make them a good thing! Car payments are one of the most unnecessary kinds of debt. It just doesn’t occur to most people to pay cash for cars.

If you’re buying a new car, you’re getting ripped off. It’ll lose almost half its value in mere months. Not to mention that the average loan on a new car hovers around $500 a month.

Like with credit cards, you’re making the banks richer, and paying far more than you need to, if you have car payments. Save up money in advance to buy a car. This will ensure that you buy one that you can truly afford.

If you currently have a car loan, start paying extra on the principal every month, and pay it off early! That will give you time to save up for your next car. By the time you need one, you can pay cash.

Related: 12 things frugal people don’t do

always broke before payday

Myth #6: You can’t afford to pay off your debt

Do you feel like you’ll be stuck with debt for life? Like you’ll never get it together or earn enough to be debt free?

It doesn’t have to be that way!

Even you can become free of the burden of debt. It does take some focus and effort, but absolutely anyone can do it.

Dave Ramsey has an awesome method for starting your debt-free journey. He calls it the Debt Snowball Method. You can read more about it here, but basically it goes like this:

  • Make a list of your debts, in order of smallest debt to largest
  • Except for your smallest debt, make minimum payments on all your debts
  • Pay as much as you possibly can on your smallest debt, until it’s gone
  • Move onto your next smallest debt, paying as much as you can on that, until it’s gone
  • Rinse and repeat until you’re debt free

It really can be that simple!

Myth #7: You have to borrow money to buy things

We’ve established that car loans and credit cards are keeping you broke. This holds true for all borrowed money.

Adopt the mantra: “If I can’t pay cash for it, I can’t afford it.”

You will always be broke if you borrow money to buy things. If you have to borrow the money, it means you don’t have the money. Therefore you cannot afford it.

Besides, how can you become debt free if you’re taking on more debt? Living without debt is the first step to gaining wealth.

Myth #8: Debt is good for your credit

If you’re holding on to your debt because of some wacky notion that it ‘helps you build your credit,’ please stop now.

That is one of those rumors that credit card companies like to circulate so they can keep people in debt. And make more money off of them.

True, having a credit card that you pay off every month (not for emergencies!) can help build your credit. But having debt does not increase your credit score.

And if you aren’t planning to borrow money anyway, having a high credit score won’t really serve much of a purpose.

always broke before payday

Myth #9: Budgets are only for accountants

If you don’t have a plan for your money, it will evaporate before you can even think of being smart with it. Budgets aren’t about restrictions. They’re about the freedom that comes with less money stress.

Budgeting means that you decide in advance how your paychecks will be spent. It does not need to be a fancy spreadsheet or use complicated software.

Here are the steps to create a simple budget:

  1. Calculate your monthly income (your take home pay)
  2. List your fixed expenses (your regular monthly bills)
  3. Total those expenses, and subtract them from your monthly income
  4. Decide what you do with what’s left (assign some money to savings, and as much as you can to debt repayment)
  5. The amount that remains is for food and entertainment

Related: Budgeting for Beginners: A Step by Step Guide for Getting Started

No matter how little money you have, you must have a plan for how to spend it. Otherwise you’ll always be wondering where it went.

If you’re always broke before payday, start by creating a budget.


Myth #10: You need a bigger house

The BS idea of a ‘starter home’ is another lie brought to us by financial institutions, intent on selling more mortgages. They want us to think about trading up to a bigger, fancier house as soon as we can ‘afford it.’

Bigger houses come with bigger bills. Higher mortgage payments, plus more costs to heat and cool it, furnish it, etc. Far too many people are house poor.

Not to mention that you can’t forsee the future. Your income is not guaranteed for life. You or your spouse could lose a job, or have a life-altering illness or injury. Or maybe you’ll want the option to stay at home and raise your kids. Or retire before you’re 80.

Higher bills come with more stress, and can keep you prisoner in situations that really aren’t best for you. Keeping more of your paycheck, instead of sending it all away to bills, will give you more freedom and decision-making power in your life.

why am I always broke

I hope debunking some of these popular money myths will lead you on a better financial path.

Please remember that being broke is not a life sentence. Stop borrowing money, save for emergencies, pay off your debt, and most importantly, believe you can be good with money!

P.S. If you want to learn how to slash your grocery budget in just 5 days, check out the FREE Grocery Shopping Makeover Challenge!

What are some other money myths you’ve heard?

why am I always broke

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  1. One money myth that really resonated with me lately is “I’m already saving everything I can!” False, and rather arrogant on my part. I just started shopping around and in the last week I found out that I could be saving an additional $648 minimum yearly on transportation and 98% on my phone bill for 6 months. Lesson learned it pays to shop around regularly.

    1. That’s a great point, Meghan! I think we always have plenty of room for improvement. That is some seriously amazing savings you discovered last week!

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