Let’s talk about four financial habits that keep people broke and more importantly, how to break free.

1. Lifestyle Creep: Spending Your Raise Before You Get It

It starts innocently enough. You get a raise, so you upgrade your car. Then you move into a bigger house, get a second streaming service, eat out more often. Before you know it, your expenses have grown to match your income and you’re still living paycheck to paycheck. This is called lifestyle creep, and it’s a silent killer of financial stability. It doesn’t matter if you make $40,000 or $140,000 a year if you spend every dollar, you’re always one emergency away from disaster. The key is to pause every time your income increases and ask: “Can I keep living like I was and save the rest?”

2. Four Habits That Keep People Broke

Let’s get honest. Here are four behaviors that drain your wealth faster than you can build it:
a. Living Beyond Your Means
If you’re spending more than you make, you’re not just treading water you’re sinking. The fix? Create a monthly budget that reflects your actual income, not your ideal lifestyle. I use the EveryDollar app to track mine, and it’s been a game-changer.
b. Thinking Payments Are Normal
Car payments. Credit cards. Personal loans. We’ve normalized debt so much that most people think it’s just a part of life. But imagine what you could do if you weren’t sending hundreds of dollars to the bank every month. Use the debt snowball method: pay off your smallest debt first, then roll those payments into the next one. Keep going until you’re free.
c. Not Saving Consistently
Saving money isn’t a one-time decision it’s a rhythm. Start with a $1,000 emergency fund. Once you’re out of debt, build up three to six months of expenses. Then, aim to put 15% of your income toward retirement. Saving is a muscle—the more you use it, the stronger it gets.
d. Trying to Keep Up with Everyone Else
You know this one. You see your friend’s vacation photos and think, “I deserve that too.” But comparison is a trap. Nearly 45% of Americans go into debt just to maintain appearances. Instead, focus on your own goals. Save for the things you truly care about and skip the rest.

3. Why Budgeting Is Non-Negotiable

I’ve never met someone who got wealthy by accident. A budget is the map to your money goals. It keeps you from overspending, helps you say “no” with purpose, and shows you where every dollar is going. If you’re not budgeting, you’re guessing and that’s no way to build wealth. Use tools like EveryDollar, Mint, or even a spreadsheet. The point is to get intentional.

4. Getting Out of Debt: Your Income is Your Greatest Tool

Debt isn’t just a drag on your finances it’s a leash. Every dollar you owe is a dollar that can’t go toward investing, saving, or building your future. Getting out of debt puts your income back in your hands. When you’re debt-free, you can start to build wealth instead of pay interest. That’s how real financial freedom starts.

5. Saving for Today and Tomorrow

Build an emergency fund now, not later. The peace of mind is worth it. Once you’re stable, aim to save 15% of your income for retirement. Compound growth is real and the sooner you start, the less you’ll have to save over time.

6. Stop Playing the Comparison Game

Comparison is the thief of joy and the enemy of your bank account. Chasing someone else’s lifestyle is a guaranteed way to stay broke. Financial independence comes when you stop trying to impress others and start investing in yourself.

Final Thoughts
Breaking bad money habits is hard but it’s absolutely worth it. When you stop living beyond your means, ditch debt, start saving, and ignore the noise of other people’s spending, your life changes. You go from surviving to thriving. You don’t need to be rich to build wealth. You just need to stop doing the things that keep you broke.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

The post 4 Financial Habits That Keep You Broke and How to Break Free appeared first on ROI TV.

1. Understanding Financial Challenges and Economic Changes

The past few years have brought financial hardships for many, from inflation to job losses. Economic cycles include both prosperity and downturns, so preparing for future challenges is essential. Instead of reacting to financial difficulties, taking proactive steps can help you stay afloat and thrive.

2. Budgeting: The First Step to Financial Control

One of the best ways to avoid going broke is to create and stick to a budget. Without a clear understanding of income and expenses, it’s easy to overspend.

Use a Budgeting Tool – The EveryDollar app (or similar tools) can help track your money.
Categorize Expenses – Identify needs (rent, food, utilities) vs. wants (subscriptions, dining out).
Adjust Spending Habits – Trim unnecessary expenses and live within your means.

A budget isn’t about restriction—it’s about taking control and reducing financial stress.

3. Eliminating Debt for Long-Term Financial Stability

Debt is one of the biggest obstacles to financial freedom. Relying on credit cards or loans to cover expenses only creates more problems in the long run.

How to Get Out of Debt Fast

Stop Borrowing – Avoid taking on new debt.
Use the Debt Snowball Method – Pay off smallest debts first to gain momentum.
Increase Payments – Earn extra income or cut expenses to pay off debt faster.

Being debt-free means keeping more of your income, allowing you to build savings and invest in your future.

4. Building an Emergency Fund

Unexpected expenses happen—car repairs, medical bills, or job loss can wreak havoc if you’re not prepared. That’s why an emergency fund is crucial.

How Much to Save?

Starter Fund: $1,000 to handle small emergencies.
Full Emergency Fund: 3-6 months of expenses once debt-free.

How to Build Your Fund Fast

• Sell unused items.
• Take on a side hustle (freelancing, rideshare, delivery, etc.).
• Cut non-essential expenses (e.g., streaming services, eating out).

A solid emergency fund prevents financial panic and keeps you from falling back into debt.

5. Increasing Income and Cutting Expenses

If you’re struggling to make ends meet, increase your income while reducing unnecessary costs.

Ways to Boost Income

Side hustles – Drive for Uber/Lyft, deliver for DoorDash, or start freelancing.
Ask for a raise – If you’ve been at your job for a while, it may be time to negotiate.
Learn a new skill – Upskill in areas like digital marketing, coding, or sales to improve job opportunities.

Easy Ways to Cut Expenses

• Cancel unused subscriptions.
• Cook at home instead of dining out.
• Use public transportation to save on gas.

Making small changes adds up quickly and frees up money to build savings and pay off debt.

6. Fully Funded Emergency Fund for Financial Security

Once you’ve eliminated debt, expand your emergency fund to cover 3-6 months of expenses.

Why It Matters?

• Covers major life events (job loss, medical emergency, home repairs).
• Prevents living paycheck to paycheck.
• Provides financial peace of mind.

Tip: Keep emergency funds in a high-yield savings account for easy access and better interest rates.

7. Investing and Wealth Building

Once your finances are stable, it’s time to grow your wealth.

Attend an Investing Essentials Event – Learn from experts like Dave Ramsey and George Kamel about 401(k)s, mutual funds, and real estate investing.

Why Invest?

Long-term wealth growth – Your money works for you.
Retirement security – Avoid financial stress in later years.
Passive income opportunities – Build financial independence.

Final Thoughts

Avoiding financial hardship isn’t about luck—it’s about making smart financial decisions. By budgeting, eliminating debt, building savings, and investing, you can create a secure future.

What’s your biggest financial goal this year? Drop a comment below!

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

The post How to Avoid Going Broke appeared first on ROI TV.