1. Living for the Moment

Poverty expert Dr. Ruby Payne says that there are two types of poverty — situational and generational. Being broke is situational. Being poor is more of a generational mindset. (There are unspoken rules for each.)

In either case, struggling with money indicates that people are living in the “tyranny of the moment” to quote Dr. Payne. Living in the moment might be a form of cognitive dissonance for not being able to accept that they can change their problem. People living in the moment say things like:

• You’re always gonna have a car payment,
• The little guy just can’t get ahead, and
• It takes money to make money.

Belief in fate leads to a lack of control over their situation. Planning and prioritization is an executive function skill needed to win the money game.

We will all experience pain — either he pain of discipline or the pain of regret.

2. Spending More than They Earn

This happens as a result of not having a monthly budget. When I decided to lose weight, I kept a food journal using My Fitness Pal. I learned I was eating way more than I thought. No wonder I was chubby!

A budget does the same thing as a food journal. When I started my budget spreadsheet back in 2009, we learned that we was spending more than I realized. And without the proper level of prudence, it’s easy to overspend and end up with too much month left at the end of the money.

3. Thinking the Stock Market is a Scam

Broke people don’t trust the stock market. Or that’s what they say… what they may mean is that they don’t know enough about the market to have a sense of certainty. They really need three levels of certainty. Certainty in the market, certainty in the underlying businesses, and certainty in themselves.

In the history of the stock market, there is no ten-year moving period that has not seen an increase — not during the Great Depression and not during nine-eleven time. Read and learn what investing offers as a means of building wealth.

4. Listening to Everyone and Everything

Broke people are often swinging for the fences in an effort to try to catch up. This means they will listen to anyone and anything in an effort to “even up” earlier losses, or flat-out non-participation.

Unfortunately, swinging for the fences rarely pays off. Hitting lots of singles with a few doubles and an occasional triple pays off in the long-run.

5. Not Following a Proven Plan

Whether it’s Dave Ramsey’s 7 Baby Steps, Bryan Preston’s Financial Order of Operations, or Ramit Sethi’s IWT, having a plan is 80% of the battle to winning with money. There are dozens of “programs” that have helped millions of families win the money game. Families who pick a plan and follow it will do better than “winging it.” But follow one plan for long enough to see if it fits your lifestyle.

I followed Dave Ramsey (I even became a Ramsey coach) for 10+ years. Over the last year, I have learned of Bryan Preston’s Financial Order of Operations (FOO). I also use parts of Ramit Sethi’s and Tony Robbins‘ plans for building wealth. The point is, read! Figure out what fits your DNA, and follow it.

As Always…

Thanks for reading! I hope this information provides food for thought. Remember that I am not a certified financial planner, a certified public accountant, a licensed real estate agent, etc. My content is for educational purposes. I am a math educator who happens to have a finance degree. Like they say, never take financial advice from a math teacher! (Do they really say that?)

But you should spend less than you earn, invest the difference, and stay out of debt!

I would so appreciate your sharing my content with anyone you feel could benefit. And if you would like a free exploratory conversation or just want to shoot the breeze about personal finances, call me and leave a message or send a text to 570-731-0425.