The truth about being broke
Are you tired of being broke? It’s been a long time since I’ve been broke, but I can still remember exactly what it felt like. I can picture all the ugly details of the way I used to struggle; the empty bank account, the awkward moments, the feelings of despair…. And honestly, one particularly awkward conversation with my sister still plays clearly in my mind to this day:
“Hey sis, I’m coming into town this weekend,” she said innocently. “Maybe we could go grab dinner.”
“Ummm, let me think about that for a second.” I struggled to find a tactful way to tell her that I couldn’t afford it.
It’s been about ten years since then, but at the time I was 22 years old and flat broke. A series of bad decisions meant that I was trapped in a desperate situation that felt nearly impossible to get out of. And although I was going to school part time, I was living off a full-time job that only paid a whopping $9.15 an hour. Oh, and it gets worse.
Related >> Financial advice to my younger self
Bad Decisions Have Consequences
Have I ever mentioned that I once bought a $22,000 car while making just a little over minimum wage? The resulting $500 monthly car payment meant that almost half of my take home pay was being spent on transportation. And by the time I realized what I had done, it was much, much too late. Since I had always had wonderful credit, I refused to let a car repossession ruin everything in one fell swoop. I was (and still am) stubborn. So, instead of letting the car go, I struggled. This often meant that I didn’t have the money to put gas in my car or to go to the doctor. And I certainly didn’t have the money to go out to eat with my sister.
Related >> The best way to buy a new car
“Sorry, I don’t have the money to go out to dinner,” I said with shame and emotion I may never forget.
“You can’t afford to go to Applebees?!”
<insert awkward silence here>
I could tell by my sister’s tone that she thought it was ridiculous that I couldn’t afford to eat at the cheesy neighborhood bar & grill. And honestly, I thought it was ridiculous too. Living so close to my means meant that I was always just one step away from disaster. One day off work, one prolonged sickness, or one unfortunate incident had the potential to leave me completely desolate. I knew that I had to change something. Unfortunately, I struggled to figure out where to start.
The Truth About Being Broke
Shortly after realizing I couldn’t afford to eat at Applebee’s, I learned the truth about being broke. As much as I didn’t like it, I was going to have to make some drastic changes in order to improve my situation. So, I sucked it up and moved back in with my parents. As sad and pathetic as that must’ve looked to outsiders, I knew that this was my chance to get on solid financial footing.
Since I no longer had to pay for living expenses, I used the opportunity to start paying additional car payments. I also began cleaning houses on the side while I went to school. I would often make $1000 or even $1500 payments on that stupid car, and I felt a sense of victory each and every time. It became a matter of principle. Every inch of my being wanted to pay off the darn thing, and I was itching to mail in that last and final payment. Fortunately, it was only a matter of time.
After a year or so at home, my car was completely paid off, and I pledged to drive it into the ground. Well, I ended up owning it for seven years before the events of getting married and having my first child necessitated a family-friendly (used) minivan. However, I still learned an important lesson from the whole ordeal.
When I finally sold it, I was shocked to learn that it was only worth $2,500. I couldn’t believe it! I cringed at the thought of all I had given up for that car. After all, I had just spent several years of my life living like a pauper to own a car that lost 90 percent of its value in seven years. And, for what? The unfortunate truth is that I did it for no reason at all, except perhaps the opportunity to learn a lesson that I may never have learned otherwise.
What I Learned From Being Broke
Being broke gave me an entirely different perspective on cash flow, debt and my own financial well-being. I learned that there was a big difference between looking like you have money and actually having money. I also learned about living within my means and the real-life consequences of unplanned purchases. And most importantly, I became willing to do anything and everything to make sure that I was never broke again. Once I was out of debt, I pledged to never let that happen again. I promised to rise above my situation and start with a clean slate. And I did.
Of course, things haven’t gone perfectly since then. As I’ve written about many times before, my husband and I took the concept of lifestyle inflation to a whole new level in the early years of our marriage. Fortunately, we’ve reigned things in over the past few year years, and we’re now building wealth like never before. We’re debt-free aside from a small mortgage and we’re hell-bent on staying that way for eternity. And even though I’ve strayed several times since becoming an adult, some of the lessons from that part of my life have stuck with me.
Related >> Getting rich slowly on your own terms
Here’s what I learned from being broke:
Don’t rely on one income stream
I was never going to get ahead while relying on one full-time job for my entire livelihood. In fact, I never really started making progress against my debt until I started picking up cleaning jobs on the side. Sure, cleaning houses wasn’t much fun. But the truth is, the extra income that it brought in completely altered my financial situation over the course of a few years.
Now that I’m older, I still strive to have several streams of income coming in. I started a profitable blog with my husband and have secured a multitude of part-time jobs that create a full-time living. I’ve also diversified my investments as much as possible including the acquisition of rental properties. I’ve learned that having one “job” means that you’re only one step away from not having a job at all.
Only you can solve your problems
As I look back, I realize that I would probably be much better off if I had filed bankruptcy and taken the car back to the dealership. I could’ve easily bought an old beater to drive around. It would’ve taken time, but I would have eventually restored my credit rating back to its former glory. Although that sounds tempting, I know that I wouldn’t be where I am now if I had chosen that path.
Live below your means
In retrospect, I now realize that spending half of my income on transportation is absolutely ridiculous. What was I thinking? Unfortunately, I wasn’t. Amazingly, I never once crunched the numbers to see what the real cost of buying that vehicle would be. Now that I’ve been broke, I realize how important it is to live below my means. And now that I make more money, I choose to live much further below my means that I really need to.
Life After Broke
The truth about being broke is that it can be exhausting and demoralizing. And although that part of my life caused a lot of heartache and embarrassment, I’m so glad that I was able to learn all of those lessons firsthand. Now that I’m on the other side, I use those experiences as motivation to continue my quest for financial independence and security. And now when someone calls to ask me to dinner, I have a choice. And when I say no, it’s not because I don’t have ten dollars in my bank account or because I’m saving to pay my electric bill. It’s because I’ve been broke and I want to make sure that I’m never broke again.
Have you ever been flat broke? If so, what did you learn from it?
Become A Money Boss And Join 15,000 Others
Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)
There are 113 comments to "The truth about being broke".
I have been flat broke for about 7 years and used credit for my shortfalls.
I finally have a better job and am no longer living on my HELOC but it will now take a few years to dig out of the hole.
Being broke sucks.
Yeah, it sucks. But now that you recognize that and are taking steps to change the situation, it’s only a matter of time until you have things completely turned around.
Wow, what a plethora of information. Always broke. Life does suck and they make it that way so you don’t have the time to THINK.
We were broke when we started grad school– no money and 10K in student loans. We were pretty good at being broke, although it meant I lost my ability to digest red meat. Being broke sucked and provided good incentive to not be broke anymore. I talk about it a little here: http://nicoleandmaggie.wordpress.com/2013/06/17/money-cant-buy-me-love/
Really I never want to be broke again. To paraphrase Mae West, I’ve been broke and I’ve been well off, and well-off is much better.
I drive our two kids around in my Hyundai Accent. I don’t understand why minivans are necessary before you have 3 kids who all need carseats in the back.
I have some chronic back problems and it was very difficult for me to maneuver my kid’s very heavy pumpkin seats into the back of my old car because it was so low to the ground. The minivan was much easier because I could just lift them in and sit them on their bases!
Now that they’re older and out of the baby car seats, it doesn’t matter as much. I still like having the minivan but my kids carseats fit fine in the back of my husband’s small car.
I feel your pain. My first minivan, purchased when I had a 18 month old and was pregnant probably saved me from going into traction. Bending + reaching = instant pain!
Pumpkin seats?
NicoleandMaggie,
It’s one thing to constantly advertise your blog on GRS, but it is another to lure readers to a particular article. I can’t believe how many small time bloggers are trying to piggy back off of GRS.
We’re not making money, we don’t have advertising (wordpress does, but we don’t see a penny of it). The only reason we blog is as a hobby and for the conversation.
However, we have been around for a long time and we have posts on most topics that show up from time to time. Rather than writing super long comments repeating ourselves, it is easier to just link to the post we’ve already written. And OMG, that happened twice this week, therefore we must be horrible people.
In the past we’ve enjoyed the community at GRS as it’s had excellent commenters and conversation. And we’ve enjoyed contributing and continuing said conversation.
You don’t have to click on the links if you’re not interested in what we have to say. It’s really easy.
Nicholeandmaggie have been posting here for years! Always comments of substance not just a “hey look at what I wrote on my blog.” They are not shilling, selling, or self-promoting. Just interested in personal finance – and the article she links to is a fantastic read. Worth the time to check it/them out before making judgement calls.
I found their blog from this site, and I enjoy reading it. The obvious “I am in this for the side income” blogs are superficial and commenters usually struggle to have something relevant about the post to say. Don’t assume that is everyone who comments on this site.
Nicoleandmaggie’s background is in economics, and her/their comments have added weight to the discussions here at GRS for years. I agree that there are bloggers who “piggyback” on the comments thread without improving the conversation much, but I don’t find that to be the case with nicoleandmaggie. Grumpy Rumblings (nicoleandmaggie’s blog) is a worthy read and they often link to really good stuff in the academic realm that I would NEVER have found otherwise.
Agreed. Their posts cannot be compared to the rampant article summarizing comments, concluding with “Good job!” and a link to a blog. I’ve never seen a non-substantial post by nicoleandmaggie.
In a way, I consider myself flat broke right now. I make a decent salary and am working on increasing a few side hustles, but with the amount of debt, consumer and otherwise, I still consider myself broke. When I start to have money left over in my account when I get paid the next time, I might think otherwise!
Nice post Holly! This was me as I was repaying my debt. I remember being in Target debating between being able to buy dental floss or a roll of paper towels. I couldn’t afford both because of stupid decisions in the past. I made a vow to myself then that I would never be back there again. I learned many of the same lessons you did and lie by many of them still today.
I hope you bought the dental floss! I can’t think of a reasonable substitute for it and it’s important to your health. Paper towels, on the other hand, are a luxury and easily replaced with rags.
Nice that you are financially good now!
I always wonder how folks in their early 20s can afford $22,000 cars. Now I just think they all make $220,000 a year tech folks who adhere to my 1/10 rule of car buying!
We were really broke as for when I was growing up. It was then I learn the realities of life and that those were situations I never wanted to be in as an adult with a family. Some of the things I went through as a kid and as an adult help me realize just as you mentioned that I had to want to do certain things and count on myself and our family. People can tell you what to do but you have to want to and be willing to do things. Living below our means has helped us tremendously. Savings are up, bills or down and life is great! More people need to learn to so no.
W and I were flat broke when we first moved in together. I still cannot believe that we managed to survive!
It’s a nice story, but isn’t just about everyone who is 22 broke?
Being 22 and broke is not unusual. It’s normal. And doing dumb things like buying new cars when you are 22 is also normal, because when you are 22, you are usually dumb and shortsighted. You don’t realize that until you are 32, or 42 or older, but 22 is pretty young.
Good post though.
It’s easy to beat yourself up for bad decisions you made when you were 22, but you hadn’t developed the ability to make good judgments yet. The fact is that the last electrical connections that are completed in our brains are the ones that involve decision making and judgment. That doesn’t happen completely until around age 25. That’s why you witness so many young adults that finally “grow up” in their mid-twenties. There’s a better explaination here http://hrweb.mit.edu/worklife/youngadult/brain.html
I really like the point you make about having multiple income streams. Years ago my husband and I decided that it would be a bad idea for both of us to remain at the same company where we met. Too many eggs in one basket. We’d still like to diversify more but are finding it difficult in our location and at our ages, 55+.
Also, since you were surprised at how much your car had depreciated you probably didn’t have a lot of financial knowledge. I was lucky that my mom is a CPA, my grandmother was interested in investing, and my grandfather was a GM dealer, so at 22 I knew about IRAs, mutual funds, and how much a car depreciates once it leaves the lot 😉 But many of my friends didn’t. So, don’t beat yourself up too badly about your mistake – but do keep educating people so they don’t make the same mistake you did!
LOL, I’ve spent a good chunk of my life flat broke! My 2 main goals in childhood were to live anywhere not infested with roaches and to be able to eat 3 meals a day. I made some bad decisions in my youth but had no way of knowing better – no PF material around then and no guiding adults or peers. Living at home stopped being an option at age 17 and I’ve been on my own or supporting others since. The main lesson I’ve learned, besides that being broke sucks, is that it is incredibly hard to dig oneself out of a hole, especially when those around you help make the hole deeper.
So sorry to hear you had to put up with roaches and hunger. I hope you have gotten yourself in a better place. Your comment about:
“it is incredibly hard to dig oneself out of a hole, especially when those around you help make the hole deeper.”
is very insightful. Most of the people I know in bad financial situations have partners who never wise up and stop the spending. And these are couples with good incomes! I really don’t see these folks ever getting out of their holes….short of divorce, that is.
I like your point about multiple income streams. My husband has a side job that brings in extra money every month, and I am working on online income. I really need to develop side incomes, because I don’t want my salary to be my primary income stream.
As you pointed out. The secret to getting rich is living a couple of notches below your income.
As long as you do this, are prudent with your savings by investing it, you will almost always bounce back from any potential pitfalls along the way.
If you live above your means, no matter what your income, you WILL GO BROKE!
I guess that works if your income is high enough that living a few notches below your income actually means something.
@Nicoleandmaggie, denial is the first step to destruction. You don’t need ads, it is still marketing with links!
What? What destruction? They kindly explain that they aren’t making money blogging (a denial, yes) and that somehow leads to their destruction?
Also, just so you know the definition of marketing:
mar·ket·ing
/ˈmärkitiNG/
Noun
The action or business of promoting and selling products or services.
They aren’t selling anything, and your comment sounds like a poor attempt at a bad miniature fire-and-brimstone sermon. As they already said, if you don’t want to read it, don’t click the link. Easy as pie.
I think in your rush to ridicule and search the dictionary for marketing meaning, you could not differentiate between a quote and statement. And while I appreciate your efforts to educate people on the definition of marketing (pun intentional), I can’t wonder if you even know how online marketing works. Here let me help you find the definition – http://lmgtfy.com/?q=internet+marketing.
Now that we have evenly traded sarcasm, let me state for the record that I am not against @NicoleandMaggie. I enjoy their blog and their comments here. But what I do not like is the denial. Summarizing that post in a few sentences here is not that hard. They don’t have to be so touchy feely about someone else’s comment since I am pretty sure that all said and done, they know in their hearts that they put the link here for getting new readers to their blog. Period. I rest my case. If you do feel the need, please feel free to flame away…
And although I was going to school part time, I was living off a full-time job that only paid a whopping $9.15 an hour.
I enjoyed this article a lot and thought it offered some good insight into the stubborn, silly decisions we make in our late teens and early twenties, but the fact that the author considered $9.15 barely livable a decade ago really threw me. I would be lucky to get $9.15 an hour now.
How far we have fallen, in terms of wages for working people.
“The truth about being broke is that it can be exhausting and demoralizing.”
I agree, but it can also be really empowering.
Mr. PoP came from a family where he never had to worry about paying for college or basic living expenses. His on-campus job paid for luxuries like dinners out, but at 20 he felt dissatisfied with his fairly cushy life and took a year off of his university studies, leaving home and school with little more than his car and a very small amount of savings. (And forfeiting any and all family support while he was gone. His parents were 100% not on board with this plan.)
Being broke meant he hustled. He worked in ice cream shops, on roofing crews, and managed to see a good chunk of the US (even making it out to Hawaii) on very little money. And when he came back to his cushy university life a year later (before he left on his trip he promised his parents he would finish school), he was way more confident and knew he’d be able to take risks in his life because he’d been able to survive (and even thrive) on his own when he was 20. That year really changed him.
This seems blindingly obvious to me, but for the average broke person, no safety net means less freedom, not more. It’s great your husband had a liberating experience, but this is not typical.
It took me two bankruptcies and three foreclosures to finally get a clue about my finances. It was a terrible time. I too remember the despair, fear, hopelessness of not being able to control myself. Fortunately, I was forced to change 6 years ago after I almost led my family straight to the streets.
Just wanted to say thanks for posting this; I needed to read it and be reminded that, hard a time as I may be having (or feel I’m having), someone else has had it harder.
P.S. – I clicked on your link to read your blog and really like it. I appreciate reading about how someone else is handling money issues when that person does not come from a perfect background, kind of like Donna Freedman’s posts.
Holy moly. Welcome to GRS. I also checked out your blog and liked it.
I’ve never bought a new car, but can’t you just sell it when you realize it’s a bad deal?
I think this statement threw me off a bit… “As I look back, I realize that I would probably be much better off if I had filed bankruptcy and taken the car back to the dealership”
After you moved back home to save up money, you could have used that money to pay off the difference of what you owed and what the car was currently worth. Filing for bankruptcy would have been way to extreme. That kind of thing will haunt you for the better part of your life. As some other comments suggest, many young adults make these mistakes and work their way out on their own. I’m wondering if maybe there was a lot more debt than just a car?
I’m not sure I understand your criticism. The whole post is about how I’m glad I learned the hard way and didn’t sacrifice my good credit to take the easy way out.
After I bought the car for 22K and drove it for a while, it was worth a lot less. I suppose I couldn’t sold it at the “break even” point but then I would’ve just had to take another loan out to buy another vehicle.
And it doesn’t really make any difference now. That was ten years ago and I no longer live paycheck to paycheck or borrow money to buy cars or things. I’m just sharing my story to provide insight on living a broke life and how I found my way out of it.
Holly, I wondered the same thing. It sounded rather extreme to consider filing for bankruptcy when you were saying your only debt was the (much depreciated) car. It made me wonder if perhaps you had other debts you didn’t mention (credit cards?) that would lead you to consider filing for bankruptcy.
This in no way is a criticism of your post. Just curious.
Hey Cathy!
Honestly, I had some very hard times in my early twenties. I always carried some credit card debt (anywhere from 1-3K at any given time) which certainly complicated things. Add to that the fact that I had to have spinal fusion twice between the age of 20-22. Each time I had surgery, I had to be off work for several months. As a low wage earner, this often meant that all the money I had went straight to my car payment and insurance.
Both of my back surgeries cost over 50K as well. Fortunately, my parents had practically forced me to carry health insurance even though I didn’t think it was important at the time. I’m also extremely thankful that my parents allowed me to move home and sort things out. I honestly don’t know what I would’ve done if it weren’t for my parents.
I never considered filing bankruptcy at the time although I was probably a candidate at some point.
Hi Holly
You downplayed the two most important parts of your experience: the surgery and minimum wage. I think you were way too hard on yourself. In the 1950-70s your paycheck would have been enough to cover an apartment and a car payment. It’s the fact that minimum wage has been held down for 30-40 years way behind a livable level that you were in that precarious position. And the runaway cost of health care was NOT your fault. Thank goodness for your parents because may of us don’t even have that layer of support and protection. Multi generational living and multiple revenue streams are the wave of the future. They’ve been doing it in Europe and S. America for centuries and so should we. Great contribution.
Great personal story and advice. I’ve never been completely broke like that, but I’ve been darn close. It sure does get scary when you know that any one bad event could take you down. I like your advice a lot. So many people think that someone else can come in and fix their money problems, but really it’s only yourself that can do that.
Suggestion for OP: I think you meant “destitute,” not “desolate.”
I’m flat broke (not necessarily flat, but definitely broke) and if I could do it all over again…
The reality is hindsight is always 20/20. I never knew I would end up with two chronic illnesses right at the age of 30 that would take away my earning power. The little things such as budgeting, living below your means, saving for a rainy day, etc is not rocket science. Its the big things that will get you when you’re not looking.
Being broke is a state of mind. I’m 50 bankrupt homeless and I’m happy and richer than I’ve ever been
I now have a woman that loves me ,no debt and a job driving truck that gives me a rent free place to live . And believe me when I tell you I’m Rich !!
Great article, been there, done that! You get to a point where you have to decide “either I live a hand to mouth existence for the rest of my life, or I do something about this.”
I discovered the greatest treasure ever, the business section at the library, I learned about basic finances, and have now graduated to investing. Along the way I discovered that I have a head for finances and good instincts. I may never be Warren Buffett, but I tell you, nobody will ever take finacial advantage of me.
My only regret, is that I wish I knew what I know now in my 20’s or 30’s but it’s never too late.
However, no matter how much of a supersaver one is, the game can be rigged for many. Last night I watched FRONTLINE’S “Two American Familes”
http://www.pbs.org/wgbh/pages/frontline/two-american-families/
It was quite tragic to see the devastation of minimum wage and to see the faces of the mythical “moochers” who turn out to be hard working people who have no chance. Minimum wage is a slow cancer growing in our country and we will all pay for it eventually.
I watched it last night per your suggestion. It was very eye opening and honestly made me feel like I was taking everything that I have for granted. It’s easy to forget how much people struggle if you don’t see it every day.
Oh, Holly, I too know the feeling. Once I couldn’t pay for a $1 root beer slushie at K-Mart and I started to cry in the store.(really??!!!) I had more lean years ahead of me in grad school but broke was pretty much the norm for the 20-somethings of my generation. I came through OK. The bright side of all this is that it built empathy in me. Now as a landlord, I see some of my older tenants and I’m concerned for their futures. Yikes. So I try to give them as decent a place as possible– dignity under a rented roof as we all muddle through this life.
Oh, you poor thing! I can totally relate. Although I’m glad that I don’t have to worry about being able to afford small purchases any more, it’s helpful to look back on that time and remember how it felt. It certainly puts things in perspective.
Sometimes we have to learn lessons the hard way. I wouldn’t want to be broke broke as with those moments some commentors have posted about but have been thinking how sometimes we need a shock to the system to get things going.
For example – I’ve always been fortunate in that my parents, although frugal, were well off enough that we never wanted for the basics. They were also generous paid my tuition in school which allowed my part time job to be more than enough to survive (especially when all your friends are even worse off).
Graduated and got a decent white-collar job and have been in the same industry since. Nothing ludicrous but enough to pay the bills, I’m not living very frugally (a lot to cut back on) but do have a small savings account and have started putting more money away into my 401(k) thanks to sights like GRS. No debt (also no mortgage).
Still – I almost wonder (know this will sound like an excuse)whether I’ll ever find the motivation to really get off my butt and start saving seriously…
Watch Suze Orman and she will give you the smackdown of your life. I’ve seen the charts explaining what you should have saved by what age and what your future will look like if you fall short…It’s enough to send you screaming. You’ll save!
I know all too well about being broke. Thousands of dollars of debt, car repossession, eviction, unemployment, etc. All due to irresponsibility and bad financial decisions. Fortunately, I have turned things around within the past few years. I now have a new job with a higher salary, multiple bank accounts, multiple brokerage accounts, and multiple streams of income. I am not wealthy by any stretch, but I am in a much better situation. Living beneath one’s means and having multiple sources of income is key.
Yeah, I’ve been flat broke most of my life, despite saving as much as possible, and living meagerly.
What did I learn from it?
Lesson: ART/GRAPHIC DESIGN IS A HORRIBLE CAREER CHOICE. Never do it! Listen to all the smart people telling you that artists/graphic designers/illustrators are called “Starving Artists” for a reason!
Do NOT “follow your dreams”, do NOT “follow your passion”. This is crappy advice if your passion can’t put food on the table. Oh sure, if your passion is to be a Neurosurgeon and you have the intelligence to succeed at it, then it’s great to follow your passion. But if your passion is in something that doesn’t pay well or has few jobs, then all you have to look forward to is a life of poverty and failure (unless you get extremely lucky).
So now, I’m living with my parents again, and going back to college for a useful degree – in Accounting. I earned my Bachelor Degree in Accounting this past December, and am in the Master’s program now. Hopefully once I graduate (in Spring 2014), I can find a good job, pay off my student loans, and not be broke ever again.
Wow, what a journey!Maybe we need to “earn” the privilege to make a career out of a passion. There’s still hope. Maybe once you set your finances up with your bread and butter career you can switch down the line. Lots of people switch careers.
Good luck to you and keep honing those skills on the side.
My husband can definitely relate to this comment. He earned his first bachelor’s degree in theatre arts only to realize that his education couldn’t really get him a job as an actor. After struggling to work as an actor in Chicago for several years, he went back to school again and spent ten years in an entirely different industry. Even after all of that, he’s making another career change this summer at age 33!
A great post! Thank you for sharing your story.
Everyone will experience the consequences of his own acts. If his act are right, he’ll get good consequences; if they’re not, he’ll suffer for it. — Harry Brow
You gained experience and knowledge. That’s what life teaches us.
However, some never learn.
Congratulations!
My husband and I were broke during the year we were engaged and first living together. We started saving as soon as we both got jobs, and managed to cobble together $2,000 in savings. I didn’t have health insurance though, so that 2 grand was all that was standing between us and a major disaster. I think back on it now, and wonder what would have happened if I’d broken a bone or needed an appendectomy??? It would have been terrible! On Friday nights we had no money to do anything with and no friends to hang out, because we had relocated 1500 miles away from all our friends and family for work. It wasn’t for everybody, but it really strengthened our relationships with each other.
Eventually we were able to get on our feet, now have fully funded emergency funds, fully funding his retirement, partially funding mine, and will have all student loans paid off by this time next year. We are both either finished now with master’s degrees, (he is half way through), and both of us will have gotten our masters’ degrees for FREE, and we are both 26. We have not quite doubled our combined gross income in 4 years through education and career advancement. Grateful for not being broke anymore!
Would like to hear more about how you got your degrees for free.
The same way my sister is attending Yale for free, I assume. By getting superb grades, kissing the right butts in undergrad, and getting a fully paid scholarship.
These things make me believe why many get broke; first, they spend more of what they earn and second, the buy what they want rather of what they need.
I like your post Holly. Such an eye opener. Thanks
I know how it feels like to be broke, to not have the funds to go out to eat with someone who has invited you to. It feels horrible, and you feel poor. For me, I would rather not buy something knowing I can afford it rather than to buy something at all. It feels much more secure knowing you can afford something than to buy something. (oh, someone should make that into a blog post! (dibs))
Great post Holly. Like others, I’ve been there. We’re not too far out of that hole actually. When I first started maternity leave, prior to my husband getting a substantial raise (that saved our asses while I was off for the year) things were more than tight. I was trying to stretch $75/month for groceries, for two adults in a very expensive province. Know what though? I’m happy I had the experience. It was the kick in the ass we needed.
Yep, been there, done that. Managed to get through undergrad with zero student loan debt (earned an academic scholarship after frosh year that I paid for with savings), but borrowed heavily to pay for law school. Even with the “$50 pizza” lecture (most ed. institutions give you the lecture about how buying that pizza today on borrowed money will result in that pizza costing you a lot more in the future), I spent more frivolously than I should have. Especially in the third year, when I had a job lined up and figured, “no problem, I’ll pay it off when I start working in September.” Yeah right. Got $10K into credit card debt before I decided to stop the madness, and it took a couple years to get on solid financial footing. Though still paying for those student loans (though at a very low interest rate, so I’m more than doubling payments on them monthly now — will be paid off 5.5 years from now), I have managed to save a significant amount of money in my 401k, and am on target to be debt-free in retirement. But alas, I look back sometimes and wonder where I could have been had I avoided debt and socked away some money very early in an IRA to really take advantage of the miracle of compound interest. As one retirement planner I met put it, “The most powerful force in the financial universe is an enlightened 20 year-old.”
When we married thirty years ago I had a good job with USPS as mailman. She also worked as a book keeper except the year each of our two children were born. I went to school at night and got a four degree in Finance to become a Postal Inspector. I was too old by the time they reached my name on the list. After the GI bill money stopped I worked an endless series of p/t jobs. Security guard, dock worker unloading trucks, even became a basic EMT and drove an ambulance. Got accepted into nursing school in 1992. Attended school during day and worked evenings. After graduation bought a huge house we could not afford. The house note was $1,300 a month. Our credit card bill was $800 month. I was working my off days as an RN in a state prison. We put the house on the market for two years but had no offers. One day the prison let me go to hire an LPN for less money. We had to take the humiliating step of filing bankruptcy in front of a judge in public affirming we could no longer pay our debts. We kept our two vehicles to go to work each day. It was quite humiliating and we can recall it vividly today. I felt it wasn’t right to live in a house we did not pay for, so we located a woman willing to take a chance and rent us her house for $700 a month. I painted the inside of the whole house, with her permission. I made many minor repairs to switches and plugs as if it was my house. About a year after filing the VA called and told me I would need to be ready to move out as the house was to be sold. I told them it had been empty for at least a year as we no longer lived there. They foreclosed immediately and today someone lives in it at a much lower price. After two years of renting our credit was enough to but another home. We also made arrangements for a $500 secured credit card. After a couple of years they offered to raise our limit and never charge a yearly fee if we waived the $500 refund, so we did. We owned that home over seven years. Our kids graduated from high school. My daughter is married and own her on. My son is preparing to move out into his own place. He works at a Walmart main warehouse 3 twelve hour shifts and makes nearly $18/hour. He will be okay and knows the pitfall of buying what you cannot afford. They learned from living though our mistakes. I retired from the USPS early in 2004. They offered me a lucrative contract RN position which lasted for 7 years. Five years ago we moved to our current home on 3 acres in hte country. My wife was severanced from her book keeping job late last year. We used our savings to pay off our home and vehicles. Since we have only utilities we live fine on my USPS retirement. It is possible to make mistakes and recover to reach your life goals!
I needed to read that, thank you for publishing that and sharing a bit of your financial past.
Good post, keep up the good work… Holly I hope you keep writing more blogs like this one. Congratulations again on a good job Holly.
I’ve been so broke that I felt like I could jump off a bridge. I hated it. It also made me take a long hard look at my finances. I did some changes. I started paying bills off as quick as possible. Then low and behold I had to go into debt again. Why? Needed a new roof and the basement flooded. Had to also get waterproofing done. I’m back in the hole again.
I hate debt!!!!!!!!!! Will never buy a house again.
My husband and I are expecting a baby any day now, we have also not been very smart with our finances. He tends to be an impulsive shopper whereas I stocked up on baby items. We lived with his parents up until 3 days before our baby is due, I still worry about our spending but now we have everything to lose and HAVE to suck it up and be smarter. Things really are no fun when I am on maternity leave and can not work for the time being, I don’t believe the financial burden should solely be one person’s responsibility. I just have to have faith that when he gets paid we’re going to come together and budget what we can and cannot spend because we have no choice, it is no longer about just him and I, our daughter deserves better than our old selfish ways. Living with in-laws and having to be supported is a very depressing yet somewhat liberating thing, we both got too comfortable and started spending, as well as we both lost a job during my pregnancy. Life is not meant to be easy but money shouldn’t be what you fight about all the time and be the reason you hate eachother. Money is the devil if anything ever were!!
i complexly agree with you stephanie.me and my wife always fight about money to.
she always tell me how her relatives have it so much better then us.it’s beyond depressing…
After reading your article and reflecting on my situation, I realize.. You are completely right! Over spending, credit, and debt load are all contributions of my own bad decisions.
Thank you for this article, and your candid look inside what happened to you. The lesson is timeless, and I will be making some drastic life changes.
I am a college student and decided it was an awesome idea to buy an amazing expensive car and a brand new expensive phone that’s so not worth what it’s made to me and am flat broke because of it cause I can’t get out of the contract until I pay it entirely off……and I only make 800 a month so I get left after all my bills and paying gas 60 bucks if I am lucky….
What I’ve learned…Being Broke SUX…!! I’m have lived hand to mouth for years upon years…I’ve never, since buying my first car at 18 been out of debt since…I’ll be 50 this year – Ha..next month…Wow, years fly by. There is nothing satisfying about being broke, there is nothing redeeming abut a mind set that says; “I’d rather be happy than rich” BS…ask ANYONE with money that has at one time been without, what they’d rather be….
I’m more broke now than I have ever been. It’s a bad feeling being… stuck. I work 11 hours per week, I have been desperately trying to find full-time work for over a year, and nothing’s come up whatsoever. I haven’t even made bad financial decisions – my car was free and I don’t own a house. I can’t pay for my wedding, I want to buy a house, have children, travel, but I just can’t do anything. It’s depressing, and there seems no way out.
yes, being broke does indeed suck.
i’m 29 yr myself and i’m broke to.
my parent were always broke(and still are) and it seems that it got passed it on to me to lol.
i have a full time job so does my wife to.
but we both of our jobs don;t pay that much.
we spend a lot of money when we got married and that’s how everything started.
my wife used to have company car but she got laid off and we had to buy a 2nd car.so you can imagine how much that adds up(gas,insurance,maintenance,etc..) and on top of that we have to go to all these stupid weddings and occasions.so there goes our money again.also i love buying stuff from ebay and i’m a big drinker.so everything adds up.all my wife’s relatives have great jobs, have a nice house.meanwhile us live in a shitty apartment.my wife always put me down and tells me about her family and how good they have it.by the time we get paid everything is gone to bills and overdraft.it’s very depressing and that’s why i drink a lot to.i don’t know when i will get out of this hole…
I couldn’t read oast you getting that car on minimum wage, and moving back with parents rent free. Give me a break. This is the story of a brat who got greedy and got bailed out, not of regular people being broke from health problems, lack of work etc. Next.
my same thoughts. I just sucked it up and moved in with my parents. lol oh to have that luxury and availability with hungry kids and mouths to feed. I could tell you a story about being broke. lol Having your recruiter pick you up from a camp ground where you live in a truck with your 3 kids and husband is broke. And yes I struggled and made a come back only to have a 20 year marriage end in divorce with an idiot ex who for purely spiteful reasons, refused to do paperwork to get rid of our house and land and refused to take his name off any vehicles, landed me right back where I started. Only now I am a lot older and have no hope of getting on my feet. Must be nice to be a spoiled child and have everything handed to you. lol
And you had the luxury to move in with parents. Not everyone has that option (or even parents to move in with).
I wish it were that easy but when you can’t even afford your meds or to buy enough food to survive there is no living below your means. The next step is homeless on the streets for many.
I do understand about living below means but broke, you CANNOT do that then. Broke means you have zero in the checking or any bank or brokerage accounts & have $20 or less in cash! It means you aren’t sure you will have the money to get through that very day so you go hungry. That is broke, a step up from homeless and it depends on which State you live being broke as to what if anything you get.
As for coming out of broke it is not easy for when broke happens over age 50. Broke at 20something, anyone can make a comeback from that even in 30s some in 40s but 50+? That last one is nearly impossible so that is the reality but you don’t give up. You keep trying as I have been doing the last four years. I now at least get food & a few medications for a serious illness but worry as to if I can pay rent at the first of the month is always there & at one time I owned three homes, two cares all paid in cash with zero debt & money in the bank with a nice sized brokerage account. My main home was over 4 thousand sqft…
I know what it is like both ways but gosh, at my age to come out of this, I am in reality.
I am 50 years old and I have been broke all my life. Since high school, I was always broke. Then I went to college and became broke again. Now I am still broke at 50! I know there has to be something that I need to change in me, whether I am not doing things right or I am not thinking right, I don’t know!
I know the feeling on being broke and still looking ways to try and make extra money but problem is, no startup cost to get started.
I’m broke right now, but it wasnt because of bad financial decisions, it was because I could never get ahead on low wages, and I have got degrees. I guess it didn’t help getting sick from toxins at work and them not caring. I’m not blaming anyone specific but I surely wont blame myself….I worked hard and I tried !! This country is out of whack.
I’m 24 years old right now. I’ve never been FLAT BROKE but I also don’t have money to throw around. I’ve been working since I was a kid so I kinda sorta have a bigger appreciation for the money I make than most people my age. My dilemma is that although I’m still young I’m not going to stay or get any younger. I decided to go back to school to get my BA but I’m really having a hard time with it. I’ve never been good at being a student and i detest that we have to take all these bs classes to get a degree and still not have a guaranteed job in the end. but I also don’t want to struggle my entire life. What else can I do? I mean I’m also trying to get into the xray program but I’ve applied for it 3 times and no luck..If I could get in I would be so happy. But if not what else is there…This is on my mind every minute of every day and it’s driving me insane!
Couple notes:
Buying an new car isn’t necessarily a bad thing. I;m not sure how old the staff writer is, but since the cash for clunkers program, used cars that are in good rapier are almost as expensive as new ones, AND DO NOT COME WITH A NEW CAR WARRANTY. Also Shop around the loans when you buy a car, dealers are better then they used to help you, I got the same amount for a basic car as she did (actually a little more Because I added said warranties) and my car payment is a hair more then half of hers. Spending half my money on transportation isn’t necessary, and Where I live I could if I needed to. I also make 11.00 an hour, but even when I lost my job and had to drop pay, the car did not KILL me. Also there is sometimes unemployment insurance you can buy, its worth the cost.
I read this entire post and it has taught me a whole lot about being poor and getting out. The biggest thing I will take away from reading this is the part where you said “only you can solve your problems”. Great post!
I am broke, my husband works a full time job and so do I. There will be no Christmas in this house. Our rent is so high. We can’t afford to move ( first and last months rent) and houses within our means are in very bad neighbourhoods. We have a 3 yr old. I have been stricken with several illness which caused me to miss a lot of work. Now that I am on the roll again…it doesnt help us out now…i pray things get better. We are always looking for better ways to save money and get better paying jobs. We do not have cable, I feed a family of 3 on 10 a day and I do not go anywhere except to work and back. Only time we eat out is if there are coupons. Maybe life gets better for some…but my husband and I have struggled so bad for 8 years and have not been able to afford Christmas in as many years…maybe things are not meant to get better for us.
Always broke here as well. I actually just typed in “i am always broke” as a google search and this web page came up. I am with a child, unemployed getting unemployment and yes looking for a job with a salary for the first time that will bring me out of this broke nightmare. ahhh say a prayer for me that the interviews and job offers come sooner rather than later, Im so depressed and miserable right now over being broke. Being its a holiday and nothing can really happen today, and no money for anything to happen here all that I feel that is left for me is the couch and sleep. SICK OF IT. GOD PLEASE ALLOW FOR THESE INTERVIEWS AND JOB OFFERS TO COME MY WAY (OUR WAY)! IN THE NAME OF JESUS CHRIST AMEN!!!!!!!!!!!!!
yes, I remember the days when I was broke all the time. Even though I was earning a military paycheck I would rummage through the trash cans for 10 cent returnable cans in Michigan just so I could put gas in the car and buy a loaf of break and peanut butter to eat before I got paid again. The military paid me fair enough….I was just drinking my paycheck. I considered selling my blood (plasma). Nothing changed until I met Jesus Christ as both my Lord and Savior. Then I was introduced to the book by Larry Burkett called “using your money wisely”. That little book for me contained the wisdom when applied to my life now means some 25 years later my wife and I have over a million in assets and now give away thousands every month. And I will still gladly pick up an aluminum can. =) Persevere!! You can get there! I Thank God for every breath that I take!
Hi, my name is sierra yore,I am tryin to get my husband,son and myself out of my grandmothers house while being flat.broke. Id trully appritiate any helpful hints and advice. Thank hou
I guess some would say there was a time my husband and I were flat broke. We actually had no income for several months due to my husband getting laid off and unemployment ran out.this was during the “recession”. We went through our savings. I was a stay at home mom of 2 toddlers. My husband found odd jobs welding and autobody my husband traded junk for a couple cars that weren’t running and got them running and inspected then resold them at a low price to get some money and help someone else out that didn’t have much money but needed a reliable vehicle. I had a garden and canned everything. I babysat cleaned a couple houses during the week, helped my husband in the garage whenever I could. Christmas we splurged and spent 20.00 at a thrift store and bought presents for family. My husband and I took scrap wood and made toys for kids and potato and onion bins for 4 families. I finally found a full time job. Then my husband got called back to work. Since then (25+ years) though the panic of that era has kept us so diversified in ways to be resourceful financially (and legally) anything we do seems to have to make money or break even doing so.Im older, tired and sick of living like this continually. We own two houses and have a small mortgage on one. Both are more house than I wish to take care of. I want to sell both .buy a smaller home with a couple of acres and a 3-4 car garage. I’d still garden and can. But with our income and assets we should still be able to go out to dinner or a weekend get away without coupons constantly or only going on a trip if we stop and find cars or antiques to resell and pay for the expenses and still turn a profit. I grew up in a frugal environment and my 28 years of marriage have been that way I’m tired and getting me depressed. I do lots of charity work and work fulltime my husband is retired but works just as hard as ever. In fact as I write this he is on a 700 mile round trip to get a 57 Chevy pickup he bought off eBay to restore and resell.30 minutes from my sister.I couldn’t go because I’m working and then babysitting and he doesn’t have the time to stop because he wants to make it back home before dark. So…. My point is yes be frugal smart and diversify but Dont get trapped in your own mindset of fear. One day you’ll wake up old and without a clue how to relax and enjoy life. I actually miss when I was in my early 20,s and a group of us would gather our dimes and enjoy Monday nights of 10cent drafts and wings.2.00 got you fed and loosened up where everyone was laughing and having a great time!I apologize in advance for typos and grammatical errors. I’m using my sons old cell phone and his screen is shattered. Frugal me is in the process of finding the best deal for the …..well you know why old habits are hard to break and some you just dont need to.
Hi Bobbie,
I know that you didn’t solicit advice, but you should sit your husband down and be as honest with him as you’ve been with us. Maybe he’d like to draw a breath and stop worrying when there’s no real reason to anymore, but he’s lost knowing how. You should sell the houses and proceed with your plan of a one low maintenance house with a garden; that is a great idea. Also, tell your husband that you want to institute a new routine in your marriage – once a week, you will go out together to a nice restaurant for a nice meal, and you can talk about anything EXCEPT money. Once you two get used to just doing it, it will come more and more easily, and you may end up reconnecting on a personal level instead of feeling like two business partners. You might even end up taking a vacation together. It’s worth a try.
I was broken and I was lost all my 8yesrs earned money..present If I want look back I hve debit of 1 million dollars.
I am 35 years old…now moving on the way to come out from debit..free
Wow this article hits close to home. I’m a recent grad who started working at a great company and granted it’s not minimum wage but it got me rethinking about buying a brand new car and losing 90% of its value 7 years down the line. Maybe I’d be better off buying an older model and using the extra money to diversify my income as mentioned in this article.
I think it might be motivational for some to know that being “broke” is not the same as being poor, and that learning to live within your means, and/or expanding your means, can have a profound affect on how the rest of your life goes. Being broke is not nearly as depressing as being out of control.
http://whatever.scalzi.com/2005/09/03/being-poor/
Living while broke is the most embarrassing and vulnerable position to be in. I have a long way to go since I’m currently broke. The lessons I’m learning now I wish I knew months ago. I know in due time this broke fever will be over but I will continue to live as if I’m still broke
Much of the original post was involved with the folly of buying a too-expensive car, a mistake to which a lot of young people fall prey. Good points were made, but I offer a caveat: don’t buy a beater, as many suggest. My stepson thought that he was being savvy by doing so, and was OK for awhile, but when all the “rubber bands snapped,” and things started going wrong, they went spectacularly wrong. One expensive fix after another. $1,500 repair followed $1,500 repair. Any savings on a modest monthly payment went down the drain with the expense of just keeping the thing road-worthy. A smarter move would’ve been to get a reasonably new Honda Civic, or something with a good dependability record and reasonable, but probably not cheap payments. A beater can too often end up as false economy.
Broke. The problem is most people who are truly broke (I don’t believe you were broke, you were managing your money unwisely, but not broke) have some rather large obstacle(s) that have prevented them from being more “successful”. I suffer from mental illness, have been sick all my life, I’m a very unstable person and I’ve never been able to hold much more than a minimum-wage job. Could I get a second job? Well sure, but keep in mind I spend most of my free time crying in a fetal position from severe bipolar swings. Medication has never done much, even if it had, I can’t afford insurance. Even if I could afford insurance, I would constantly have to miss work for appointments and therapy sessions. I think the biggest issue for someone like myself is that there is no light at the end of the tunnel….. I’m going to be just as sick if I am debt free, so i don’t care as much as I should. Financial freedom is great…. unless you are bipolar, or have cancer, or have lost your limbs, or are an addict. Because lets face it, I know plenty of people who live on the breadline, but they still get by….. we are a very entitled people in this country, not having internet or air conditioning is NOT poverty, those are luxuries. Being broke is far more…. the fact that I can come into a library and use the internet, and reply to this, makes me question if even I am truly broke.
This is a story about someone who was bad with money. I do not think you have an idea what broke means. It is going to the government to beg for housing it is struggling to even buy a loaf of bread and bottle of milk. It is walking because a train, bus or car cost too much.
Even a full time job only covers rent. If you had had kids when you were “struggling” what would you have done? This article should be looking at how lucky you are to have family,rather than thinking you know about true poverty.
Try being black!
I needed to read this! Thanks so much for sharing!!
Being broke is a choice, I realize that an abundance of money does not make you happy neither…Some of us manage very low sums of money and make ends meet…Whereas some are blessed with more and spend very unwisely…Money is very important, I strive to continue to educate myself on how important and vital money truly is, living within your means is a lot of scarfing, but it is worth it.
One thing is being broke is not being poor. Being broke is failure to manage your resources/money. Guys thanks for all your contributions.It is not too late, I shall give it a try.
I’m sorry but your story sounds like you didn’t know how to budget money right, being broke is a lot harder then it sounds. I’m not going to lie but I also don’t want anyone to think that I’m looking for attention or anything else, so I will tell you a little about my situation. I’m 27 years old and I have two daughter’s their ages is 7 years old and 2 months old, I don’t currently work because I can’t afford a babysitter. The money that I do get each month is barely even enough to cover all my bills and the items that both of my children needs. I don’t have a car so my only way to get to places that I need to go to such as the store or to the doctor is to walk there, I had a part time job but I had to give it up once my 2nd child was born and when my oldest got out of school for the summer, because like I said before I’m not able to pay for a babysitter. I know how to manage money but it’s not easy struggling on a daily basis to make it by with what money I do get. That’s just a short story of my life of being broke, but I’m blessed with two beautiful kids and a roof over our heads and a warm place to sleep at night and food on the table, I thank god everyday for the things that I do have because money can’t buy happiness. Thank you for reading my post, if you have any advice for me please feel free to leave a comment, also please don’t leave any rude comments on my post.
I am currently married and always broke and I’m tired of it. I don’t know where to begin to change this. I also have children that I want to have the experience of living in their own home. I need financial advice on how to increase my income.
I wish I knew, I wouldn’t be thinking and
wondering how to get rich (or even comfortable!)
every minute of the day.
When my husband and I were doing ok,
yes we had problems –
but they weren’t about how to buy dinner that night,
they were problems we could handle,
without stress and sleeplessness.
I don’t know how people do it, I’m sick
to death of being broke!
Great story, it’s more therapeutic than a gambling story which is why I’m always broke 🤔
Riki, I can sympathize with you being broke because of gambling. Gambling is not the only reason that I am broke, but it is a significant part of my present financial condition. I hate being broke, but it is so easy to stay in the ‘gutter’ when you have been in the situation so long. I pray that you can find your own way out of your situation.
I am broke after being rich for What I could be consider as such in my area. My reasons for being broke are compmetely different. I saved quite regularly when I had cash but never invested. I wanted to have much money to do what I want. Finally when I went on leave to go do purchase I WAS Pickpocketted a huge sum of money. My ex fiance that was keeping part of my money was again dupped and loss the money I gave her to keep. From there it was succession and succession of problems. I ended up broke and alone. I became bitter and jealous at my friends successes and financial success. The worst was when I had to borrow money from my father. I am 28 and was rich now am broke. I have a job now and I can eat; buy some clothing and rent a room. I have started saving again. I am bent on being rich and never being broke ever again. I save now for a specific project. I will never used saved money for someone else problem. Saved money is for a project. Being broke sucks. Terribly
I know EXACTLY what you mean –
I feel like screaming, everyone else has everything –
fabulous vacations, brand new cars, houses,
the best of everything, money is no object, etc.
While my husband and I struggle every week,
because my own brother robbed everything we ever had.
I’m not going to go into details, but the heartbreak
(and poverty) just never go away.
We used to have money & were doing okay,
now I find myself continually stressed & worried sick.
And to top it off, no one in the family believes how
my brother robbed us, making it twice as stressful.
Does life ever give you a break??
I wonder.
And then there is being broke because of depression.
Well, time waits for no one. Any ideas on how to actually acquire money a little quickly (I mean reasonably) without the usual “You need to do better!” lectures? Some of us have a lot more common sense than a lot of you financial wizards seem to think. You may have lived perfect lives or did so after a mistake or two and did great. But there are those of use who are struggling and it’s not necessarily our faults.
Forget it. You probably have nothing more than that.
I learn to always keep some type of money in your account and invest in a cd with 25 dollars a month, Try to keep a job..I was almost homeless.
You had a car; You had a home; You had a job.
How does one without _any_ of that start back from 0?
Can you cover _that_ and not just “oh im barely making due even if im left with nothing in my pockets at months end” ??
Have you ever had to beg your friend’s mother to go grocery shopping for $20 dollars worth of food?
Or stay on their couch?
What say ye, with apparently better financial position than I?