Cash Crunch Chronicles: “It’s Giving Broke” Behavior
- Davina Jackson
- Mar 28, 2024
- 10 min read
Updated: Apr 2, 2024
Welcome to The Woman CFO – a space crafted just for you, where we embark on a journey of financial empowerment.
Today, we're diving into a topic that hits close to home for many of us: "broke behavior."
Everyone knows them... those habits and tendencies that seem to keep us stuck in a cycle of struggle, despite our best intentions to break free.
We're going to shine a light on those sneaky little behaviors, and offer some insights and strategies for breaking free from their grip.
But before we jump in, let's get one thing straight: we're not here to shame or judge. We do not do that here (at all or ever).
So, if you’re ready to recognize and overcome the cycle of “broke behavior” and take back control of your finances, we got you.
Are you ready? Let’s go.
Instant Gratification Zone: Skip to the Good Stuff
"It's Giving Broke" Behavior Explained
Let’s start our chat by explaining exactly what "broke behavior" is and why it's important to address these patterns to improve your financial well-being.
What is "Broke Behavior"?
"Broke behavior" refers to those seemingly harmless habits that individuals, often unconsciously, engage in that perpetuate their financial struggles.
These behaviors can manifest in various ways, from overspending on non-essentials, emotional spending, avoiding budgeting and financial planning, relying too heavily on others for financial support and ignoring appropriate financial education.
While everyone may exhibit some degree of "broke behavior" at times, it becomes problematic when these habits consistently hinder financial stability and progress.
Why It's Important to Address "Broke Behavior"?
Addressing "broke behavior" is crucial for individuals looking to achieve financial stability and long-term success.
It starts with identifying "broke behavior" actions to gain a deeper understanding of financial habits and patterns.
Then by understanding the underlying causes, you can take proactive steps to change behavior and improve financial situation by making more informed decisions with your money.
Think of “broke behavior” like this: you're trying to get in shape, but you keep eating junk food and skipping workouts. You simply won’t see the results you want with this behavior. The same goes for our finances.
5 Most Common Broke Behavior Habits
Broke Behavior #1: Overspending on Non-Essentials
Many of us have fallen into the trap of splurging on items we don't truly need, whether it's that fancy latte every morning or the latest tech gadget.
While occasional indulgences are normal and even enjoyable, consistently overspending on non-essentials can wreak havoc on your finances and prevent you from reaching your financial goals.
Understanding Overspend on Non-Essentials
Overspending on non-essentials occurs when we prioritize short-term wants over long-term financial health.
It's easy to justify these purchases in the moment, convincing ourselves that we deserve a treat or that we'll be happier with that new purchase.
However, the thrill of buying something new quickly fades, leaving us with a sense of regret and a lighter wallet.
The Impact of Overspending
The consequences of overspending on non-essentials can be far-reaching.
Not only does it drain your bank account, but it also makes it harder to save for important goals like buying a home, starting a family, or retiring comfortably.
It can also lead to increased credit card debt, higher interest payments, and financial stress.
By being mindful of your spending habits and making conscious choices about how you use your money, you can break free from the cycle of overspending on non-essentials.
Broke Behavior #2: Ignoring Budgeting and Financial Planning
While creating a budget and sticking to it may seem daunting, it's a crucial step towards achieving financial stability and reaching your long-term financial goals.
Why Budgeting Matters
Budgeting is like having a roadmap for your finances—it helps you understand where your money is going, prioritize your spending, and plan for the future.
Without one, it's easy to overspend, live paycheck to paycheck, and struggle to make ends meet.
Common Reasons for Avoiding Budgeting
Many people, especially those who are new to managing their finances, may avoid budgeting for a variety of reasons.
Some common reasons include feeling overwhelmed by the process, fearing restrictions on spending, or simply not knowing where to start. However, these barriers can be overcome with the right approach and mindset.
Getting Started with Budgeting
If you're new to budgeting, the thought of creating a budget from scratch may seem intimidating. But don't worry - we're here to guide you through the process step by step.
Here's how to get started:
Track Your Expenses: Begin by tracking your expenses for a month to get a clear picture of where your money is going. Use a notebook, spreadsheet, or budgeting app to record all of your expenses, from bills and groceries to discretionary spending like dining out and entertainment.
Determine Your Income: Next, calculate your total monthly income, including your salary, any additional sources of income, and any financial assistance you may receive.
Set Financial Goals: Setting specific, measurable financial goals will help you stay motivated and focused. Think about what you want to achieve with your money, whether it's paying off debt, saving for a vacation, or building an emergency fund.
Create Your Budget: Based on your income and expenses, create a budget that allocates your money towards essential expenses, savings goals, and discretionary spending. Be sure to include categories for unexpected expenses and savings for the future.
Review and Adjust: Life changes, and so should your budget. Once you've created your budget, review it regularly and make adjustments as needed. Keep track of your spending and adjust your budget accordingly to stay on track towards your financial goals.
Benefits of Budgeting
Creating and sticking to a budget may require some effort, but the benefits far outweigh the challenges. Budgeting can help you:
Reduce financial stress and anxiety
Take control of your spending
Identify areas where you can cut back and save money
Reach your financial goals faster
We wrote two detailed guides to budgeting that will help you learn how to budget, find the best budget for you, and how to stick to it. Read the Essential Guides to Budgeting Part 1 and Part 2
Broke Behavior #3: Emotional Spending
Emotional spending occurs when we use shopping as a way to cope with or regulate our emotions.
Whether we're feeling stressed, anxious, bored, or even happy, we may turn to retail therapy as a quick fix to boost our mood or distract ourselves from our feelings.
While this may provide temporary relief, emotional spending often leads to buyer's remorse and financial stress in the long run.
Keep an Eye out for These Triggers
Common triggers of emotional spending include stress from work or relationships, boredom, loneliness, feelings of inadequacy or insecurity, and even positive emotions like excitement or celebration.
Understanding your personal triggers for emotional spending is the first step towards breaking the cycle and regaining control of your finances.
Breaking Free from Emotional Spending
Now that we've identified what emotional spending is and why it happens, let's explore some strategies for overcoming this harmful financial habit:
Practice Mindfulness: Before making a purchase, take a moment to pause and ask yourself why you're buying this item. Are you genuinely in need of it, or are you trying to fill an emotional void? By becoming more aware of your motivations behind your spending, you can make more intentional choices with your money.
Find Alternative Coping Mechanisms: Instead of turning to shopping when you're feeling stressed or anxious, try finding healthier ways to cope with your emotions. Whether it's going for a walk, practicing mindfulness or meditation, or talking to a friend, finding alternative coping mechanisms can help you break the cycle of emotional spending.
Set Spending Limits: Establishing spending limits for yourself can help prevent impulsive purchases and keep your finances on track. Consider setting a budget for discretionary spending each month and sticking to it, even when tempted by emotional triggers.
Delay Gratification: Practice delaying gratification by implementing a "cooling-off" period before making non-essential purchases. Wait at least 24 hours before making a purchase to give yourself time to evaluate whether it's truly worth the money.
Seek Support: If you find yourself struggling to overcome emotional spending on your own, don't hesitate to seek support from friends, family, or a financial counselor. Talking openly about your financial struggles and receiving support can help you feel less alone and more empowered to make positive changes.
Broke Behavior #4: Avoiding Financial Education and Awareness
Managing money may not be the most exciting topic, but having a basic understanding of personal finance is essential for making informed decisions and securing your financial future.
Let's look at why financial education is important, some of the common barriers to learning about money, and practical steps you can take to improve your financial literacy.
Why Financial Education Matters
Financial education is the foundation of sound financial decision-making. It equips you with the knowledge and skills necessary to manage your money effectively, navigate complex financial products and services, and plan for the future.
Without financial education, you may find yourself making uninformed decisions, falling victim to financial scams, and struggling to achieve your financial goals.
Common Barriers to Financial Education
Many people, especially women, face barriers when it comes to learning about personal finance.
Some common barriers include:
Lack of Access to Resources: Finding reliable and accessible financial education resources can be challenging, especially for those with limited internet access or financial literacy programs in their communities.
Fear of Judgement: Talking about money can be taboo, leading to feelings of embarrassment or shame for those who may not have a strong understanding of personal finance.
Complexity of Financial Topics: The financial industry is filled with complex jargon and concepts that can be overwhelming for beginners, making it difficult to know where to start.
Practical Steps for Improving Financial Literacy
Fortunately, there are steps you can take to overcome these barriers and improve your financial literacy:
Step 1: Start Small
Begin by learning the basics of personal finance, such as budgeting, saving, and managing debt.
There are countless free resources available online, including articles, videos, and podcasts, that can help you build a solid foundation of financial knowledge.
Step 2: Seek Out Financial Education Programs
Look for financial education programs and workshops offered by community organizations, libraries, or online platforms.
These programs often cover a wide range of topics and provide valuable guidance from financial experts.
Step3: Ask Questions
Don't be afraid to ask questions and seek clarification when you come across a financial concept or term that you don't understand.
Reach out to friends, family, or financial professionals for guidance, or join online forums and communities where you can learn from others' experiences.
Step 4: Stay Informed
Stay up-to-date on financial news and trends by following reputable sources such as financial websites, blogs, and news outlets.
Understanding current events and their potential impact on your finances can help you make more informed decisions.
Step 5: Practice Financial Self-Care
Just like physical and mental health, financial health requires regular attention and care. Make time to review your finances regularly, set goals, and track your progress towards achieving them.
Broke Behavior #5: Dependence on Others for Financial Support
While it's natural to seek help from family and friends during times of need, relying too heavily on others for financial assistance can perpetuate a cycle of dependency and prevent you from taking control of your own financial future.
Understanding Dependence on Others for Financial Support
Dependence on others for financial support can stem from a variety of factors, including:
Lack of Financial Literacy: Individuals who lack financial literacy may not have the knowledge or skills to effectively manage their money, leading them to rely on others for guidance and support.
Limited Income or Resources: Those with limited income or resources may turn to family members or friends for financial assistance to make ends meet or cover unexpected expenses.
Cultural or Social Norms: Cultural or social norms may place emphasis on family support networks, leading individuals to seek financial assistance from relatives as a matter of tradition or expectation.
Consequences of Dependence on Others
While seeking support from loved ones can provide temporary relief, dependence on others for financial support can have long-term consequences, including:
Strained Relationships: Constantly relying on others for financial assistance can strain relationships and create tension among family members or friends.
Loss of Independence: Dependence on others can erode your sense of independence and self-reliance, leaving you feeling powerless and unable to make financial decisions on your own.
Financial Instability: Relying solely on others for financial support can leave you vulnerable in times of crisis or change, making it difficult to maintain stability and security in your finances.
Strategies for Breaking Free from Dependency
Breaking free from dependence on others for financial support requires a combination of self-awareness, empowerment, and proactive steps.
Here are some strategies to consider:
Develop Financial Literacy: Educate yourself about personal finance topics such as budgeting, saving, investing, and debt management. Knowledge is power, and the more you understand about your finances, the more confident and independent you'll become.
Create a Financial Plan: Take control of your financial future by creating a realistic financial plan that aligns with your goals and priorities. Set achievable milestones and take proactive steps to work towards them, whether it's paying off debt, building an emergency fund, or saving for retirement.
Build Emergency Savings: Establishing an emergency savings fund can provide a safety net and reduce the need to rely on others for financial assistance in times of need. Aim to save at least three to six months' worth of living expenses to cover unexpected expenses or income disruptions.
Seek Professional Help: If you're struggling to manage your finances or break free from dependence on others, consider seeking guidance from a financial counselor or advisor. They can provide personalized advice and support to help you navigate your financial challenges and build a stronger financial future.
Communicate Openly: If you're receiving financial support from family members or friends, communicate openly about your financial situation and goals. Express gratitude for their assistance, but also be honest about your efforts to become more financially independent and self-sufficient.
How to Move Forward with Confidence
As we wrap up our chat on broke behavior, let’s take a moment to reflect on the key insights we've gained:
Awareness is Key
Understanding the behaviors and patterns that contribute to financial challenges is the first step towards overcoming them.
By recognizing the role of emotional spending, avoiding financial education, and dependence on others, you're already one step closer to making positive changes in your financial life.
Empowerment Through Education
Financial literacy is a powerful tool that can empower you to take control of your finances and make informed decisions.
By investing in your financial education and seeking out resources and support, you can build the knowledge and skills needed to navigate the complexities of personal finance with confidence.
Taking Action
Breaking free from "broke behaviors" requires action and commitment.
Whether it's setting financial goals, creating a budget, building emergency savings, or seeking professional guidance, every step you take towards financial empowerment brings you closer to a more secure and resilient future.
Moving Forward with Confidence
As you continue on this journey towards financial wellness, remember that progress takes time and patience.
Be kind to yourself and celebrate the small victories along the way.
Surround yourself with a supportive community of friends, family, and mentors who can offer guidance and encouragement as you navigate your financial journey.
Above all, believe in yourself and your ability to create the financial future you deserve.
You have the power to break free from "broke behaviors" and build a life of financial resilience, empowerment, and abundance. So, take the first step today and start paving the way towards a brighter tomorrow.
Ready to embrace your inner CFO? Join our community. Share your financial goals, budgeting tips, and success stories in the comments.
