7 reasons I haven’t been broke in a long time

I want to share 7 reasons I haven’t been broke in a long time. This may sound like a smug post, so before you start thinking, what I think you might be thinking, maybe we should define what broke means to me.

My definition of broke is simply paying my bills on time and being able to afford the basic things without needing to loan money.

Anyone who knows me personally would probably say I look broke judging by the car I drive and some other parameters I would not go into fully. Feeling a million dollars is actually more important to me than looking a million dollars. It is great to look and feel a million dollars though, but sometimes the looks bit is all down to perception isn’t it?

Anyway, I am here to tell you 7 reasons I haven’t been broke in a long time. Here it goes in no particular order:

1. Upbringing and Faith

My upbringing was a very modest Christian one where we were taught the principle of contentment. This is very foundational because this is what underpins my very simple approach to life. I have heard people say that coming from a modest background can prevent you from wanting to aspire to higher things. And sometimes when you do become wealthy you may not allow yourself to enjoy it. Basically, it is this limiting belief from experiencing lack that is causing you to be modest. I do have very high aspirations but remember where I have come from. That and my faith keeps me grounded.

We weren’t rich growing up, but my family attended a missionary church so we went to villages often on church outreaches. Going on these outreaches and seeing people in greater need than us was always a humbling experience. The thought that even though you are not living in a mansion but are still blessed helps in remaining content. One of the reasons I haven’t been broke in a long time is that having an attitude of contentment helps you spend below your means and this helps to achieve financial stability.

Wealth consists not in having great possessions, but in having few wants

Epictetus

2. Good financial education

I have had the opportunity to have formal financial education that I have applied to my personal life. I realise that not all finance professionals are good money managers, so the focus is not just on formal education. Financial literacy is something everyone needs to have. As a young person in my early 20’s, I invested so much time reading lots of books that informed my current money mindset.

This is my vision for https://www.valuespeaks.com to offer everyone access to this all-important financial education. For people who don’t have it and for people who do but need reminding. Having a good grasp of financial concepts like budgeting, the importance of having an emergency fund and the difference between asset and liability will mean that you will be prepared and avoid being broke often.

3. Dependency

I remember when we were little, you are taught as a child to reject any offer of food or treats not just from strangers but sometimes from people who are family friends. It took me a while to understand this and for a bit, I thought my parents were being mean, after all our hosts were being hospitable. This will resonate with most people who grew up in Nigeria. This attitude has stayed with me so much I would sometimes eat before going to a party just in case I wasn’t offered anything, as going to ask for food was so out of character.

I hate being financially dependent for many reasons and would prefer to manage than be a burden. This means that I have learned to drink ‘Garri’ (west African staple food) when I need to and fine dine when I can. As an adult, I have learned to check this attitude doesn’t come from pride, so I receive help, and accept hospitality when necessary.

Life sometimes happens despite our best efforts so this is not to say that when we have challenges we are burdens. I am only saying that the fact that I don’t like to be dependent motivates me to be financially responsible as can be possible.

4. Having the right definition of wealth

What is wealth? when does one truly become wealthy? The Oxford dictionary defines wealth as a lot of money or properties; riches. How much money is a lot and how many properties? I think generally the middle class gets this very confused, which is probably why they are stuck in the middle. I don’t consider myself very wealthy yet so I don’t live a false wealthy lifestyle.

Becoming wealthy is a process for most people and as some people would say, don’t eat your seed before you can plant it. A little bit more money in the bank account without any meaningful assets does not translate to wealth. I know that a lot of people say that life is short so enjoy it or YOLO! (you only live once). I even heard someone say what if you die tomorrow? and you’ve saved so much and didn’t enjoy life? My perspective is that material things are not what should really make you happy. A lot of wealthy people are miserable. Money should be a tool to enhance your life and others’, understanding this will help to remain content and enjoy life while taking those baby steps towards wealth.

5 Lifestyle inflation

Lifestyle inflation is similar to maintaining a very wealthy lifestyle when you are not wealthy. Lifestyle inflation is when you upgrade your lifestyle with every additional income earned. For example, I was joking with my husband about how he is very specific about the brand of juice he drinks. I often remind him of our student days when all we could afford was squash and how the squash probably tasted just as good.

This is a minor example though as the juice isn’t a huge dent to our budget. It’s the big changes, the bigger house, faster car and so on that counts more. I try to look out for this to ensure we don’t get caught out. What do you do with your pay rise? do you maintain your lifestyle and invest the extra? Or do you upgrade your lifestyle? Meanwhile who out there got a payrise in 2020? drop me a comment I need to know!

6. Adapting quick

Being resilient and quick to adapt is important and has helped me to avoid being broke. There were times we were financially unstable and had to adapt quickly. As the CFO of my household,  I have presided over some serious restructuring and unfortunately, things like take-outs and football subscriptions don’t usually survive. Staying on top of your budget and being able to react as quickly as possible is important.

There are some instances when change cannot be predicted but effects can be mitigated. We are in one of those times currently and even though the pandemic was sudden, we have had some time to adjust. For some who have lost their jobs and livelihood, adjusting will be a harder process so I hope you are reaching out and getting some support. Part of adapting is not just doing a cost-cutting exercise like I do but reassessing and finding ways to diversify your streams of income.

7. Budgeting and having an emergency fund

Budgeting

This is crucial as I have mentioned in the ultimate guide to budgeting series, You should absolutely create a budget if you don’t have one already. You can download my free excel spreadsheet by entering your email below:

Creating an annual budget and monitoring it from month to month to ensure spending goals are on track has been one of the reasons I am hardly late on any payments. I also rely on automation and reminders to stay organised, as well as pots to set money aside for the large and irregular bills.

Emergency Fund

Lastly, I cannot overemphasize the importance of having an emergency fund. It’s not the all in all, as if you are in dire straits this can run out too. But an emergency fund can really help when there is a temporary set back to provide some stability. A quick reminder that anyone can be broke regardless of how rich or poor they are. Being broke is often down to liquidity and the temporary lack of liquidity/cash is not always a crisis.

What reasons resonated with you? Please remember to drop a comment and share, share, share!