Here are 5 reasons you are broke

It’s salary week and that time of the month when we create our budget for the next month. Interestingly most people become broke before the next pay. Here are reasons:

Overspending: Spending more than you earn is a common reason why people are broke. Consistent acts of spending money daily on things that are overpriced and not needed can add up over time.

Debt: Not paying off debts can lead to financial difficulties. Debt can accumulate quickly, and the interest rates can make it difficult to pay off.

Lack of financial education: Not having a good understanding of personal finance can lead to poor financial decisions. It is important to learn about budgeting, saving, and investing to make informed financial decisions.

Loss of income: Losing a job or a source of regular income can cause significant financial strain, especially if your wages are already stretched thin. Medical expenses are another major factor contributing to bankruptcy.

Unaffordable mortgage: Escalating mortgage payments can be a significant financial burden. If you are unable to keep up with your mortgage payments, you may be at risk of losing your home.

To avoid being broke, it is important to make informed financial decisions, live within your means, and have a good understanding of personal finance.