8 Reasons Why You Have A Desolate Bank Account

Here are 8 reasons behind that common American question “Where did my paycheck go?”

Reason #1: You don’t budget.

If you plan to be successful in life, you will have to master two important challenges. How to wisely use your resources and how to reach your fullest potential. Both of these challenges require you to plan for the allocation of both your time and money. Ever wonder why every business use budgets to control expenditures? It is because a budget prevents expenses from stealing profits. A budget is merely a document that allocates planned spending. Households should ensure a budget is completed for next month’s income according to the spending needs and savings goals of the household. Most people budget on payday and do a running tally of what bills they plan to pay. After they draw that final line to finish the subtraction, they leave the balance there as what they have left to spend. That is not budgeting, that is a very elementary way to manage one of your most precious resources. If you often wonder “How did I spend that much?” then you aren’t budgeting. The budget is a permission slip for spending an allocated amount in a predefined category. If you need a more expansive understanding of budgeting then check out this article What is a Budget?

Reason #2: Your Lack Self Discipline

Self-discipline very important when it comes to goal attainment. Don’t have any goals written down? Good luck with being successful at anything! Anyway, I will save that rant for another blog post. We each start our days with a tank of willpower that gets diminish throughout the day. Automation and constant reminder great ways to combat a lack of discipline. The easiest way to increase your self-discipline is to remind yourself of your “why”.  Sometimes it takes something as simple as a memory of an experience or loved one to put a bit more gas in the willpower tank.

We each start our days with a tank of willpower that gets diminished throughout the day. Automation, accountability partners, and constant reminders are great ways to combat a lack of discipline. The easiest way to increase your self-discipline is to remind yourself of your “why”.  Sometimes it takes something as simple as a memory of an experience or loved one to put a bit more gas in the willpower tank.

Reason #3: Lack of Effort

Laziness is a huge issue that will guarantee you’ll never be successful at anything. Laziness can manifest in many ways the most common being television and other forms of excessive meaningless downtime. It takes time and effort to manage money and to change behaviors that prevent wealth building. Dave Ramsey famously rants about a great place to go when you need money… it’s called work!

The reason most people are broke has more to do with a refusal to research, read, and learn the subject of money. Most people don’t spend a single hour in the week dedicated to personal finance and are simply not willing to give up the root causes of their money woes (ie. spending, bad habits, overextended car notes, etc. ). All those choices stem from a lack of willingness and effort.

Reason #4: Negative influences and environments

Negative environments will impact your philosophies, thoughts, and behaviors. It is unhealthy to stay in an environment that prevents your self-development and personal growth. In addition, hanging around with people who have negative habits will also have a negative impact on your positive and productive new approach to money and life, avoid these people like the plague. If you think that you can accomplish your goals and keep bad company you are mistaken, as the successful are pulled away from environments, people, and content that does not support their thoughts, beliefs, and values. “We are the average of the five people we spend the most time around.” -Jim Rohn

Reason #5: You don’t seek to limit cost of living

Business teaches us a great lesson that can be applied to our personal finances, that lesson is that well management of expenses elevates profits. Businesses also use budgets and break-even analysis. In personal finance, we have budgets and cost of living. The less you required to sustain your lifestyle the greater your opportunity to wealth. This is why I strongly urge you to read Epic Formulas to Win the Money Game

Reason #6: You make purchases for others

Keeping up with the others is an awful way to find fulfillment. I live in a nice neighborhood with plenty of high-income earners (assumption based on home values). I noticed a neighbor had purchased a brand new 2017 Corvette z06 in electric blue. One month later another 2017 Corvette was parked a few homes down. Shockingly a few months later the 3rd $80k-$100k vehicle appeared in a neighbors driveway. I couldn’t help but laugh at how quickly my neighbors had competed to keep up with the Joneses. I started to think that “wow there must be one hell of a sale on Corvettes!”. Nope, no sale… just some primal competition to impress people you’ve never met. Don’t ever buy things that stem from a motivation to impress others or display your “status” to others, these emotions cloud judgment and these decisions can sting for years.

Reason #7: You have overextended you resources

I found out years ago,  that in order to win this serious game of money you have to understand the principles that put you in the best position to win. Remember Pete Carroll’s decision in Super Bowl 59 to pass on the 1-yard line instead of following a well-known principle of 1 yard and goal with an all-star powerback = run the ball up the middle. It didn’t work out so well for the Seattle who lost the game on that single play. Many people think they don’t earn enough to save or live abundantly, the truth is they aren’t aware of the philosophies that help them to win. For example, following the principle of never paying more than 30% for your mortgage/rent should never be broken. Car payments are often the culprit for people who earn nice incomes but feel broke. Don’t complain that you don’t have enough, ask the question “Why don’t I have enough?” or “How much can I afford” and conduct the research to get credible answers that solve the problem. Knowledge prevents ignorance, so research before your act. Ignorance is usually the culprit for a person overextending themselves.

Reason #8: You don’t pay yourself first

The golden rule of wealth building is to pay yourself before you pay anything. This principle works best when you setup automatic transfers into a savings or investment account. People who have money problems usually have no savings. People have no savings because there is no plan in place to save. Sounds elementary, because it is! This is not a difficult concept to grasp. It doesn’t matter the amount, $1 per day has the same wealth bell-curve as any other dollar amount. Consistency is the key to wealth, not the amount or vehicle.

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