How To Avoid Being Financially Broke For Young Adults

Tired of being broke and depressed?

Been there through that before. I have survived being broke. It is a matter of a good budget, good money management and self-discipline. There is nothing much more than it. If you are looking for a quick fix to your financial deficiency, you are in the wrong place.

Here, I am going to give the foundation of how not to stay broke, so you will always have some money in your account every month. Usually, the lack of money in our lives stem from our inability to either make money or save money.

Do you agree, good reader?

Besides these two factors, repaying a huge debt could leave you broke too. With that said, here is how to stop being financially broke as a young adult.

What To Do When You Are Financially Broke

When you are in a place where there is an opportunity for you to grow financially, poverty is a choice. With that said, here are how not to go broke financially.

1. Maintain Gainful Employment For Consistent Income Stream

Without a job, it is hard to have money. Unless you have someone who you depend on financially, there is no income stream to help you afford the things you want. Hence, the depressed feeling of being broke.

As a young adult, it is recommended that you start working at legal working age. Not only does this get you a steady income, but also it makes the workplace familiar enough for you to figure out ways to increase your income in a timely manner.

Why is this important, dear reader?

Besides having the money to afford the things you want, the availability of a steady income provides an opportunity to save. This is especially in cases where there is an absence of heavy financial responsibility or debt. As a result, you will have money for creature comforts.

2. Spend Your Money Based On Your Needs

One mistake some adults make, is to assume they need everything.

If you are broke, you simply cannot afford to spend in order to impress. This is where I recommend something called a scale of preference. A scale of preference organizes and prioritizes your needs, so you will spend responsibly.

How does this help you to avoid always being broke?

Well, for starters- organizing your needs into hierarchy will help you budget for them. Your scale of preference should be grouped into necessities and non-necessities. Until the necessities are taken care of, it is recommended not to spend money on non-necessities unless you can afford to.

So, spend your money on what you need for now. When you start making enough, you can create a budget to help you afford other desires.

3. Avoid Credit Cards To Prevent Credit Card Debt

To avoid being broke in your 20s, avoid using a credit card. Not that a credit card is a bad deal, but when used indiscriminately, it can get you into some serious debts. Also, let us not forget credit card companies do not give you their money for free.

Oh yes.

You are always charged an interest for any amount borrowed. While the repayment of this debt can increase your credit score, non-payment can severely damage it. This is if it does not leave you broke first.

Here is what I mean.

Besides the interest rates of credit cards which vary monthly, there are associated expenses for having a credit card. Most credit card companies will charge you a maintenance fee for having the credit cards.

In all, these expenses can rack up quite a lot of money every month. For any adult who barely makes above minimum wages, such monthly expenses can leave him or her broke. Hence, why credit cards should be avoided at all costs until you make enough money to afford having one.

4. Save Money To Avoid Being Financially Broke

This is the secret to not being broke. Yes- save, lad , save!

Let me give you a glimpse of the power of saving. While I was a sophomore in college, I saved enough to build my parents a house in my native country. Then, I was in my third year in the United States as an immigrant.

Why am I telling you this, my good reader?

I built the house working as a janitor during my second year in college. Regardless of income, it is possible to save quite a lot annually. But, I did mine working two jobs then. This is especially, if you are making a few dollars an hour above minimum wage.

In addition to making above minimum wage, you increase your chances of saving more, when you follow a budget.

Now, how do you begin saving?

One beautiful thing about saving, is it does not have to be huge. A mere ten percent of your after-tax income can suffice. Let us say you bring home $2000 monthly, 10% of $2000 is $200 saved monthly. Over a twelve month period, this is $2400 annually.

It is enough to get you something nice, is it not?

Now, imagine what else you can do with the saving. If you are not sure how to save money on your current income, read how to create a personal budget to help you figure out ways to save.

5. Stay Away From Expensive And Inconsiderate Friends

Last year, I wrote an article: Are your friends costing your money?. You need to check this article to determine whether some of your friendships cost you a lot of money monthly.

In your late teen and early twenties, you are going to meet one or more friends who like to make you spend. Now, there is nothing wrong with hanging out and spending with friends. However, there is something I called expensive friends.

An expensive friend is a friend who costs you a lot financially. By financially, I mean a friend who always encourages you to spend more than you budget without considering you could go broke. These could be friends who like to borrow and not pay back. Or even worse, wants you to always pick the tabs whenever you hang out with them.

When you maintain such friendships, it will leave you broke and resentful. Therefore, make friends who encourage you to manage your money well.

When you have friends who are frugal and money-conscious, it will help you manage your money well. This is because you do not want to be the only known broke friend amongst them. As a result, you are inspired to be good at making and managing your money well.

Conclusion Of Ways To Avoid Being Broke

You could still have a job, and be broke.

If this is your case, then go through all the steps here to see whether you are financially responsible. By financial responsibility here, I refer to living within your means while managing your money well. When this is the case and you are still broke as a result of low income, then it is time to upgrade your job.

What do I mean by upgrade your job, good reader?

I mean acquire new skills needed to get you a better paying job, if you are struggling financially. This is possible. It all depends on you. For example:

You cannot cry about flipping burgers for pennies, when you are not willing to learn a trade skill which will pay you more. Nowadays, you can acquire highly-sought and paid skills without going to college. Trade schools training range from welding to medical care giving nowadays.

But, your success depends on whether you are willing to learn new skills or not. Am I right?

Finally, it is very possible not to be broke again. You just have to change your lifestyle and money habit, when your finances are affected by them. And trust me, you can survive being broke.