Stop being life’s pet hamster trapped in a perpetual cycle of brokeness. You deserve more than a cage containing the wheel that keeps you spinning away from financial freedom. It’s time to break the cycle and take back your power.
In this episode of Happy, Healthy, and Wealthy, we discuss the 3-step process to break away from broke – and stay away. I give you personal insights and actionable tips to help you shift your mindset, take action, and remain persistent and consistent.
Read the transcript below or watch/listen on YouTube and Spotify. As always, thank you for your support! <3
It is up to you to break the cycle of being broke. No one else can do it for you. Only by deciding to break the cycle and taking action can you build the wealth that you deserve.
Hello and welcome back to Happy, Healthy and Wealthy, the podcast where we discuss personal finance with mindfulness and intention. I’m Nicole. I’m the host of this podcast and the founder of Mindful Money Media. I’m really excited to have you here and to be here recording this video for you. It means so much to me that I able to talk about this stuff.
And I’m so excited to grow and build this community. So please, if you like what you see, like the video. Subscribe. Leave me a comment. Maybe give me some future video suggestions. Anyway, with that all being said, let’s jump into it.
Today’s episode is all about how not to be broke. This may sound like I’m being facetious, but I’m serious. So many of us are stuck in a cycle of being broke. And it’s probably inherited from our parents and reinforced by society. But it’s time to get out.
The formula is rather simple, though rarely easy. I see it as a three step process. The first step is changing your mindset. You have to be in the correct state of mind to move throughout this whole process. The next is planning and taking action according to your goals. And finally, you must remain persistent and consistent in order to see change.
Now, when I say the correct state of mind, I mean that you have to have a burning desire to not be broke anymore. To want to change your situation and to have a better life and financial future for yourself. You have to be so fed up with your current state of financial affairs that you only want something different. You only want better. It can only get better for you. Now there are quite a few mindset shifts that may be necessary for you to reach this conclusion and come to this mindset. And I talk about a few of them in last week’s episode, but you will know if you’re ready to move on with the other steps.
You’ll be willing to make sacrifices and dedicate time to building knowledge and setting goals and making changes that will change your life. This is the stage where you’re going to see your life for what it is. And maybe it’s not a bad life, but it could be better. And you want better, and you’re willing to find better.
Sometimes there’s a breaking point. For me, it was when I realized that I was stuck with a car payment that was siphoning all of the money out of my bank account every month, and I had tens of thousands of dollars in debt just looming over me. I spent many, many sleepless nights filled with anxiety about my situation until I decided to change. I deserved more than that, and so do you.
Your own breaking point will probably be different than what mine was. And it could be a lot of things. It could be struggling to pay your rent yet again, month after month. It could be seeing your bank balance hit zero or even negative, or having to go without dinner just so you can make sure that your kids have something to eat.
It doesn’t really matter what your breaking point is. What matters is how it impacts you. Reaching your breaking point should be the fuel that you need to get out of your situation and into something better. This desire for something better can look like a lot of things. It could be the freedom to travel or not having to worry about rent or bills. It could be being able to run your own business, or stay home with your kids, or to purchase your dream car or any combination of these things. Really, whatever it is. This burning desire is the catalyst that alters the way that you think. You can no longer hold the same ideas and carry out the same behaviors if you no longer want to be broke.
Something has to change. So whatever your goals are, write them down. It’ll be easier for you to stay on track if you remember that everything you’re doing, you’re doing it for a reason. You need a why. And once you’re able to determine your motivation, you’re ready to move into planning and taking action. And this is where things might get uncomfortable for you.
You will be forced to confront your unhealthy financial habits, which isn’t always exactly an easy or comfortable thing to do for anyone. You’re going to have to determine if you’re living above your means and how much debt you have, and how much emergency savings you have, if any. You’re going to have to ask yourself, what expenses can I cut? And do I need to make more money? And if so, how much?
You need to be asking yourself these things if you want to change your finances and no longer be broke. Broke people live above their means, fund their lives with debt and only make minimum payments, have little to no savings, and live paycheck to paycheck. Breaking the cycle means no longer living that way and being honest with yourself about your financial situation, so you can make a plan to get out of it.
Your lifestyle may take a temporary step down as you set yourself up for success later on, but that’s something you must be willing to accept, especially if you’ve been living way above your means. You’re going to have to bring that down. There’s just no way around that. Otherwise, you’re just going to stay broke. You may need to cut out certain discretionary expenses, such as going out to eat or streaming services, or daily Starbucks in order to put that money towards other goals, like paying off debt or building an emergency fund.
The only way you’re going to be able to keep track of everything and really know your numbers, is through budgeting. Budgeting is the only way that you’ll know what comes in and what goes out on a monthly basis, and I recommend this to everyone. I do it myself. I’ve been doing it for years, and it makes such a huge difference in my spending and in reaching my financial goals.
There’s a lot of different ways that you can budget, from using a spreadsheet to using a pen and paper. I do have my own personal budget template linked that I use myself, and I also sell it. So if you’re interested, you can check that out if you’re a spreadsheet person. And then there are the different methods of budgeting.
So there’s the 50/30/20 rule. And there’s also zero based budgeting. So the 50/30/20 rule is percentages. So 50% of your income goes to needs, things like your rent or your mortgage, groceries, utilities or things of that nature. Then 30% is for wants. So going out, having fun, having a nice dinner and then 20% goes to savings.
This is a good guideline, but not everyone will necessarily fall into these percentages, and especially if you have any debt that you’re trying to pay off, 30% to wants might need to be reduced. Personally, I wouldn’t spend that much on discretionary expenses if I was trying to pay off debt or reach another financial goal.
Then there’s zero based budgeting, which is simply making sure that every dollar is accounted for in your budget. Every dollar is allocated somewhere to some kind of expense, or it’s going into savings, or it’s being invested, or it’s going to debt. And so there’s no money left over just sitting around at the end of the month. This doesn’t mean you’re left with no money at the end of the month. It’s just that every dollar has a job, and what it goes to is up to you and your life and your lifestyle, your particular situation. So you will know your numbers and you’ll be able to allocate it where it needs to go.
Once you know what you need to do, do it. Action is what’s really going to create change. If you have debt, figure out how much you need to pay off per month and pay it. If you have to build your emergency savings, figure out how much you need to save per month and save it. If you’re overspending, figure out what you need to cut out and cut it out. If you need to make more money, figure out how much more you need to make and make it.
It may be helpful for you to meet with a professional, like a financial planner, to help you get an accurate and complete understanding of your finances, and a planner will be able to be objective with you and tell you what is working for you and what isn’t. Everyone’s situation is different, so there is no one size fits all approach and your approach is probably going to change over time with life. Life happens, so you’ll have to adjust.
I’m going to give you a bit of tough love right now. I don’t care if you don’t always feel like doing these things. I don’t care if you feel like you’re missing out. I don’t care that it’s hard and that it sucks sometimes. You are doing these things for the betterment of you and your financial future. And to be honest, I’m saying this as much for my benefit as I am for yours. I’m still working through what I need to do to have the life that I want.
I don’t always feel motivated to be the best financially, and sometimes I slip up. That’s human. It happens, but you can’t let it become a habit. And the thing is, this isn’t about feeling motivation. Motivation is a short term visitor. It’s very flaky. It comes and goes, but you have to be able to do this regardless of whether you feel like it or not. That is where consistency and persistence come in.
Consistency is building a habit. The way that you get up in the morning, wash your face, get dressed, eat breakfast, whatever it is you do. You don’t really have to think about it, and you don’t get to that point by doing it once or twice. You do it every single day and it becomes routine. It becomes a habit because you’re consistent with it.
You have to do the same thing with your financial habits, whether it’s budgeting, checking your accounts, monitoring your debt, and just fixing your mindset. You need to be able to build consistency by doing these things regularly. Just as you can’t use the StairMaster once and lose 10 pounds, you can’t skip Starbucks once and be wealthy. You need to compound these behaviors over time, and you need to be persistent, even when it feels like nothing is changing, like it’s all for nothing. Like everyone else is living better than you, so why even bother? You need to stick to your plan.
I find that using a financial habit tracker can be helpful, especially if you’re a very visual person and you like to see a representation of your progress. In my Money Mindset workbook, there is the habit tracker that’s there exactly for this reason, and it’s included in the section on Building Healthy Financial Habits. So I’ll link to that workbook as well as the budgeting template.
Another really useful tool is to utilize a debt payoff tracker or a savings tracker to monitor your progress. It’s really important that you’re able to see that the changes you’re making are having a positive impact on your finances. I can personally vouch for the fact that seeing my debt balances go down every month, just added more fuel to my fire to get it paid off, and it’s just so motivating and empowering. I know what I said about motivation before, but seeing that, it sparks something.
Breaking the cycle of being broke is not about waiting around and hoping for something to change. It’s about deciding that you’ve had enough and taking action. No one is going to do it for you, but you don’t need them to do it for you anyway. You are fully capable of doing this for yourself. You deserve financial freedom, stability, and peace of mind. The question is, are you willing to put in the work to make it happen?
So in the spirit of putting in work, I’m giving you homework. I want you to identify one step that you can take today, whether it’s setting up a budget, canceling subscriptions, negotiating a bill, or even just cooking a meal at home instead of eating out and then do it.
Work on shifting your mindset, reminding yourself that you are capable, taking action, and remaining persistent and consistent. These steps are the difference between remaining stuck and broke and moving forward to financial freedom.
So drop what you’re working on in the comments. I want to hear your thoughts and support you on your journey. If you found this episode helpful, please make sure to like, subscribe, share, and if you feel like this could help someone you know, please share it with them.
That’s all for today. But until next time, stay focused, stay persistent, and stay consistent. Bye! 👋