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Mon. Dec 2nd, 2019

Just Over Broke

Financial Advice For The Soul

Just Over Broke – 10 Signs You Are In Financial Straits

9 min read
Sorry We're Broke

To be “just over broke” does not literally mean that you are penniless. Nor does it necessarily mean that you spend more money than you earn. The commonly accepted meaning of the phrase “just over broke” is that you have a source of income, but you are basically living paycheck to paycheck. You earn money, but you spend most of it, if not all. And you have very little to show for it. In fact, more often than not, you end up running out of money long before your next payday. And up having to coast along, living on scraps, until the next payday comes. Simply put, if you are just over broke, then a vicious cycle of income and expenses has got you in its clutches.

Ten Signs That You Are Just Over Broke

So how exactly do you know if you are just over broke, and how do you know whether you fit the classic definition of someone who finds themself in this situation? Well, here are ten telltale signs that are characteristic of a person who is just over broke:

Sign #1 That You Are Just Over Broke: You Are Unable To Save At Least 10% Of Your Income

10 percent - just over brokeYou may have heard the old saying “pay yourself first”. What that basically means is that before you pay all of your creditors, you should pay something toward your retirement, your emergency savings fund, or toward any long-term goals that require a significant investment of money. By doing this before you pay everyone else, you can ensure a secure and fulfilling future. Failure to do so will render your inept, inert, and helplessly stuck on the hamster wheel of the rat race, living paycheck to paycheck. As a consequence, you end up spending all of your money on your expenses, and you leave little to nothing for yourself. This is one telltale sign that you are just over broke.

Sign #2 That You Are Just Over Broke: You Are Mired Deep In Credit Card Debt

credit card debt - just over brokeIf you have fallen into the credit card trap, please know that all hope is not lost. The allure of being able to “spend now” and worry about paying for it later, with “easy” payments as low as $10 or $25 per month, can seem like a great deal. But once you start racking up the credit card balance, and the monthly payments come due, that is when reality hits you. Credit cards become a pain at that point. It is then that you finally come to realize that credit cards are actually a curse, and not a blessing.

There is a saying that compound interest is the 8th wonder of the world and is one of the greatest discoveries of all time. Well, it may be great when you are on the receiving end of the interest. But it’s not so great, when you are the one who has to pay it.

You may think that it having to pay $100 in minimum monthly payments on your credit card bills every month is seemingly innocuous. But if you were to analyze your credit card statement, you may find that the finance charges alone could very well account for $80 of that! You are not getting any closer to paying down your credit card debt in a situation like that.

Perfunctory Precepts Concerning Credit Card Debt

(Financially savvy people make it a point to review their credit card statements in detail every month. How much are you paying in finance charges? That is money being flushed down the toilet every month!)

Does a significant chunk of your monthly cash flow go into paying the minimum payments toward your debts (credit cards, loans, mortgages, car payments, student loans) every month? 

Are you are left with very little in liquid cash?

If the answer to both of these questions is yes, then you are definitely just over broke.

Sign #3 That You Are Just Over Broke: You Have Just Enough To Pay The Bills But Not More

paying the bills - just over brokeIf you earn $5,000 per month, but your monthly bills, including housing, utilities, loans, and credit cards equals to $4,000 per month, you might think that you are living large at $1,000 per month.

But is that really a surplus? Don’t be fooled! Think again: What about all the money you need for discretionary spending? You need money for groceries, transportation, entertainment, household items, clothing, hobbies or entertainment? And then there are unexpected expenses – and we aren’t even talking about emergencies, but day-to-day expenses that might creep up out of nowhere.

Even if you are able to reign in your discretionary spending, you may have very little money left, when all is spent. At this point, you will find yourself counting down until the next payday.

Sign #4 That You Are Just Over Broke: You Run Out Of Money Long Before Your Next Payday

run out of money before next paycheck - just over brokeLet’s say you get paid $1,000 every two weeks (for argument’s sake). If you find yourself running out of money, and you barely have about $100 or $200 left, a week, or a week and a half, into the pay cycle, then you are essentially living a “just over broke” lifestyle. Despite your best efforts to stretch your budget to last as long as possible, you just can’t seem to avoid exhausting your discretionary spending budget so quickly.

Sign #5 That You Are Just Over Broke: You Dread Doing Your Taxes

dread doing your taxes - just over brokeAs the deadline to file your income tax returns looms closer, your level of anxiety and stress starts to skyrocket. You probably find yourself procrastinating until the last minute to file your income tax returns, each year, because you are dreading delaying the inevitable: Owing money to Uncle Sam because you underpaid your taxes throughout the year. Never-mind the fact that you did this a way to temporarily inflate your cash flow throughout the rest of the year. Now unfortunately you have to pay up!

Sign #6 That You Are Just Over Broke: You Are Living Off Of Your Credit Cards

living off of your credit cards - just over brokeYou are just over broke if you are literally dependent upon your credit cards in order to survive from one paycheck to the next. If you pay down your credit card, but you don’t have any cash left to spend for the remainder of your pay period, then you will inevitably end up spending from your credit card again – the same amount that you just paid off, you will end up spending that much again, if not more!

Sign #7 That You Are Just Over Broke: You Are Constantly Looking To Borrow Money In Order To Make Ends Meet

borrowing money to make ends meet - just over brokeIt is a sad state of affairs, when your only recourse for surviving financially from one paycheck to the next, is to borrow more money. If you are constantly trying to do one of these things, then you are definitely just over broke:

  • taking out another loan
  • trying to secure a debt consolidation loan
  • trying to transfer your balances to a zero-interest credit card
  • refinancing an existing mortgage, auto loan, or student loan

Sign #8 That You Are Just Over Broke: You Have Taken Out A Payday Loan Before

pay day loans - just over brokePayday loans are a major trap. If you have never taken out a payday loan before, if there is only one piece of advice you should take away from this article, it is to avoid payday loans like the plague!

Payday loans are the worst consumer scam ever. It is a form of legalized extortion, taken to the extreme. The idea behind payday loans may seem innocuous. After all, to someone in a desperate situation, it may seem like a godsend. They sell you on the idea that you can instant access to cash, in an amount that you might seemingly be able to repay in full within two to four weeks’ time. No credit check is even required.

But have you seen the exorbitant interest rates that payday loans charge you? They can charge you as much as five hundred percent interest, due within two to four weeks! Yes, you read that correctly!

Admonition To Avoid Payday Loans At All Costs (Pun Intended) 

Whatever you do, do not ever fall for the trap of getting a payday loan. Even if you pay it in full, you end up paying a hefty amount of interest in full. But the sneaky thing that these lenders will oftentimes do, is offer you “amnesty”. They will  “allow” you to pay less than the total amount due before the original due date. On face value, this might seem like a generous offer. They are giving you the flexibility to repay a payday loan! What was originally due in two to four weeks, is now due in six to eight weeks!

But guess what! If you accept their offer to pay less than the total balance due, you will end up racking up potentially hundreds of dollars worth of interest. This is far worse than a credit card!

Sign #9 That You Are Just Over Broke: You Have No Savings

empty piggy bank - no savings - just over brokeA truly financially solvent household would have several months’ worth of emergency savings stashed away. You must proactively prepare for any one of life’s unexpected twists and turns, good or bad:

  • Loss of employment.
  • Medical emergency requiring hospitalization.
  • Devastating or disruptive event of catastrophic proportions that has befallen you.
  • Urgent home repairs.
  • Necessary car repairs.
  • Relocation to a new home due to job transfer, change in life circumstances, eviction, or the need to downsize.
  • Purchasing a new car.
  • Expecting a baby!

Whatever the case may be, you need to be prepared to weather life’s storms, for better or for worse. If any of these situations would spell financial disaster for you, then you are definitely just over broke! If you are one missed paycheck away from filing for bankruptcy, then you are indeed in straitened financial circumstances.

Furthermore, a healthy savings account is essential not only in case of some kind of setback. Savings is also essential if you are planning to make a major purchase in the future, such as:

  • Putting a down payment on a house or on a car
  • Vacationing
  • Taking unpaid maternity (or paternity) leave
  • Marriage
  • Paying for higher education

Does there seem to be no light at the end of the tunnel? Does the math seem to indicate that you will never be able to save up for these expensesThen you are, without a doubt, just over broke.

Sign #10 That You Are Just Over Broke: You Cannot Afford To Take Time Off From Work

no time off from work - just over brokeIf your employer pays you by the hour, then ever hour counts. If missing even one hour of work can hurt your paycheck, then you are indeed just over broke.

This is nothing short of debt slavery.

It is an sorry situation to be in, being unable to take an hour off to go to the doctor.

Equally sad is if you cannot call in sick from work.

And what about being able to take time off from work to care for a sick child?

Not having the leeway to take time off to relax, unwind, and go on vacation is another example.

Does taking time off for any of these reasons mean that you won’t be able to pay the bills?

If the answer is yes, then you are literally on the verge of being broke.

Each hour of pay that you earn keeps you one hour away from financial insolvency.

The same holds true, and the situation is even further exacerbated, if you have to work two jobs in order to make ends meet!

What To Do If You Are Just Over Broke

If one or more of the above ten signs applies to you, then you are in dire straits, financially. So this begs the question: Do you know what to do if you are broke? How can you break out of this vicious cycle?

Do you ever find yourself thinking any of these thoughts?

I need a loan now!

I’m broke and need money fast!

I am broke and depressed!

If yes, then you definitely need help! The good news is that you have come to the right place! Help is within reach!

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