Everyone has their own definition of wealth. For some, it might be a 7-figure net worth, while for others, having a roof over their heads is all they need. There are also others who never have money, or no matter how much money they have, they consider themselves broke.
‘Broke’ mentality is a mindset developed through years of conditioning that leads people to believe they never have enough money, and thus they end up making poor financial decisions driven by fear or the need for instant gratification when they do have it.
Some rich people can also have a broke mindset. They could have financial wealth according to society’s standards of living, but it still might not be enough for them if they compare themselves with others who are wealthier. They might also squander all their money and end up broke if they make poor financial decisions. It all comes down to your attitude toward money and how you handle it.
So, is being broke or rich a state of mind? Let’s see.
How to know you have broke mentality and how to break it
There are several ways to identify if you have a broke person mindset. Some of these include;
- Always thinking broke
Being broke is a state of mind. How you think about money can affect how you create and spend it because you actualize what you think and say. So, if you are always thinking about how broke you are or saying things like, ‘I am always broke’, ‘I can’t be rich,’ or ’I never know how to manage money,’ you will start to believe that is how it is. You will not make any effort or be motivated to change your situation because you already accepted it.
Being broke starts with the thoughts you allow into your head. Change your way of thinking, and you will attract abundance. To overcome broke mentality, practice positive self-talk or rephrase by saying something like, ‘I’m temporarily broke’ or ‘I will find a way around/through this’.
- You don’t think outside the box
Most people with broke mentality have been claiming they are broke for months or years even. Perhaps you have been working at a low-paying job, or your business isn’t bringing in enough money. If you always make excuses and never think of alternative ways you could change the situation, you may become stuck.
If you had a rich person mindset, you would not allow yourself to remain in the same position for that long. You would come up with creative solutions to your problems and find ways to get the resources you need to change your circumstances and get ahead.
For instance, you could change careers, gain more skills to increase your opportunities, start a side hustle, change how your business operates or the product you sell, or spend your money more wisely.
You Might Also Like: 8 Tips to Manage Money When You’re Broke
- You spend more than you earn
Do you know that the people who spend like they are rich are probably the poorest? People with broke mentality usually spend most of their money as soon as they get it. You may also find yourself spending too much or borrowing money to maintain status or seem rich. In the process, you end up draining all your savings and getting into credit card debt for no good reason.
Spending beyond your means can not only lead to poverty but it will also be accompanied by stress over the debt you got yourself into. You will not have the freedom or time to enjoy whatever you spent the money on because you will be busy trying to repay the debt.
You can’t build wealth if you are always in debt or if you squander all your money. So, if you want to avoid becoming broke, you need to create a spending plan. Start spending your money only on things you can afford without impoverishing yourself and buy only meaningful things. Having social status will not put food on the table.
You Might Also Like: Stop Spending Your Money on These 7 Things
- You never save or make investments
People with a broke mindset are the same ones who say they earn too little to save. However, even with a small income, you can still set aside a portion, even a small percentage, to go into your savings account or investments.
Savings are the first step toward attaining financial freedom. Without savings, you will have no money to fall back on when unpredictable circumstances happen, such as emergencies or the loss of a job. Failure to save money is also why you might find yourself in the same situation you are in 5-10 years from now because you live paycheck to paycheck.
If you truly earn a small income and only have enough for groceries and other utilities right now, it might be time to consider alternative ways to increase your income, such as side hustles, more shifts, a second job, or looking for a better-paying main job. There are many other ways to become rich even if you are from a poor background or if you don’t earn much. Staying poor is a choice!
You Might Also Like: 7 Things You Can Do Now That Your Future Self Will Thank You For
- You value quantity over quality
People with broke mentality often prefer to buy cheap things over expensive ones because they believe they would be wasting money. They may also think that they could purchase more of something at lower prices with the same amount of money. But unfortunately, most times, cheap is expensive.
Since most cheap things are of low quality, they are not durable, and you might have to keep buying replacements or making repairs later. You could end up spending more on these than you would have if you had just bought expensive good quality items with a longer lifespan in the beginning.
- You prioritize wants over needs
Spending your money on a luxury cruise vacation is not a need while using it on education, housing, or bills is. If you have broke mentality, you do not know to prioritize needs over wants. You might have to make late payments for basic needs like house rent and water because you squandered your last paycheck on unnecessary things.
If you have this poor spending habit, consider creating a budget to plan and monitor your spending and allocate money to various expense categories.
Setting financial goals and coming up with a plan can help you save money for the luxurious vacation if you do want to go, all while ensuring you don’t become poor or neglect your responsibilities in the process.
You Might Also Like: 5 Best Ways to Invest in Yourself for a Better Future
- You have a scarcity mindset
If you look at what you have in life, you’ll always have more. If you look at what you don’t have in life, you’ll never have enough.Oprah Winfrey
The scarcity mentality views money as a finite resource you have to hoard to keep someone else from getting it. You think that you will never have enough, and there is nothing you can do about it.
When you have the scarcity mindset, you also focus on what you don’t have, instead of what you have, thus, resulting in dissatisfaction with your life. For example, someone with a net worth of $20 million could still feel like they are broke when they compare themselves with someone else who has a bigger one than theirs, say $50 million. They already achieved financial freedom but they feel like that is not enough because there are others with more.
To overcome the scarcity mindset, be grateful and content with what you have. If you are actually broke, stop comparing yourself with others and focus on growth. Find ways to earn more money if that will make you feel better.
Using affirmations to remind yourself you have/are enough can also help you shift from the scarcity mindset to the abundance mindset.
You Might Also Like: 6 Ways to Develop an Abundance Mentality and Get Rid of Scarcity Mindset
So, is being broke a mentality?
‘Being broke is a state of mind’ is a statement that many people like to believe is only said by the rich because they are already successful. But, it is true. Being broke is a mindset. The way you think about money can influence your spending habits and your attitude toward creating wealth.
To break free from the broke mentality, you have to change your way of thinking and attitude towards money, become wiser with your spending habits, and continue learning new ways to make the most out of every cent. Like any other habit, switching from a broke mindset to an abundance mindset will not be easy, but it will be worth it.
Save this on Pinterest
Read more articles from Aisles of Life here.