How to Stop Being Broke

It can be difficult, at times, to keep on top of your financial situation. While this is especially true for people that don't have much income, it can also be true for folks that make a decent wage. Regardless of your income situation, there are things you can to do stop being broke.

Instructions

1. Define your budget. Identify your daily, weekly, monthly and yearly expenses. Be realistic about how much you spend what you spend it on. Make sure to include the obvious expenses such as food, housing and gasoline, but also watch out for hidden expenses like smoking or car maintenance. Add 10 percent of your monthly income to go into savings. Calculate your expenses for a single month.

2. Compare your expenses with your income. If your income is higher than your expenses, put the difference into savings. If your expenses are higher than your income, you have two choices: cut back somewhere in your budget or find ways to earn more money. Those are your only two options if you want to stop being broke.

3. Look for ways to cut back on your budget. Identify, for example, which grocery stores in your area tend to have lower prices. Watch for sales on everything, not just clothing. Clip coupons, comparison shop and visit second-hand stores. Every one of these practices will help you cut back.

4. Consider three factors before you make a purchase--if the item is your budget, do you need it and can you get it cheaper somewhere else. If you want to stop being broke, you have to avoid impulse buying.

5. Earn more money. There are many opportunities for people to make a little bit of extra money. You might take a part-time job, or you might consider starting a home business. Be willing to work harder and longer in order to stop being broke.

Tips & Warnings

• Don't cheat yourself out of putting money into savings. You need to have money in savings for when disaster strikes, or for other life expenses such as college.