Have you ever wondered how that friend who asks to borrow money manages to afford smoking and lottery scratch-off cards? You feel bad asking them to pay you back for some reason, so you just sit back curiously.
Between prioritizing their funds for the most frivolous items and just managing to get by, somebody like this may never have financial freedom. Here is a look at some of the expenses broke people still manage to cover.
1. One More Trip to the Casino
I lived in Las Vegas and will never forget when a table dealer told me, “Nobody has ever gotten rich from gambling.” People play the lotto or go to casinos hoping to get dealt the hand that will make them rich and think their problems will disappear. While the goal of gambling appears to be taking care of financial obligations, like paying off student loan debt, most people continue to use their winnings to gamble.
2. An $8 Pack of Sticks
First of all, the fact that smoking is horrible for your health should be reason enough to quit, but the prices are also ridiculous. In America, the average cost of smoking is $8; in other countries, it can be up to $26. Additionally, those with low income are more likely to smoke than Americans who are considered middle or upper-class. Even though it is hard to kick the habit, by continuing to smoke, people are more likely to stay broke.
3. Booze
Alcohol is available to every class of Americans. However, broke people might buy booze even when they can’t really afford it. Unfortunately, those with this habit may forget about their financial situation or other issues. There is also a trend of buying large 40 oz beers because they are inexpensive or a name brand of liquor, which is higher proof.
4. Name Brands (Or Convincing Knockoffs)
Broke people tend to buy loud graphic tees or bags with large logos. By flaunting a shirt with Gucci printed across it or carrying around a large Louis Vuitton monogrammed bag, they believe they are giving off the impression that they are wealthy.
Sometimes, these designer items are low-quality, inexpensive knockoffs. Wealthy people who can afford a $600 T-shirt often opt for something less flashy and don’t mind paying for the high quality.
5. Souped-up Vehicles
Buying a vehicle is a significant investment. People who do not have the funds to buy a brand-new car or higher-end model should buy what they can afford. While this makes sense, spending extra cash to accessorize your vehicle to make it flashy is a waste of money. Broke people tend to have money to tint their windows, lower their vehicles, get a huge logo printed on the windshield, and even add flashy lights.
6. Fresh Ink
Did you ever know somebody who had no money to put gas in their car but showed up with a new tattoo? Same. It is another thing that broke people tend to have money for. I have heard that getting tattooed can be addicting, so maybe that is why they feel the need to cover this expense. Either way, it is not helping their financial situation at all.
7. Junk
There are bins in every store for $5-and-under items or 10 for $10. This is what I mean by junk. People view this as a good deal, but the items often end up in the trash. Broke people tend not to buy items they will appreciate, which would be more beneficial.
8. Fast Food
Fast food is affordable and, well, fast. This makes it appealing and accessible to those who may not have much money. It is also easier than cooking at home. Groceries and cookware cost money, but eating healthy will save you money in the long run. Fast food lacks nutrients and is often paired with sugary soda, which affects your health.
9. Investing in MLMs
In hopes of getting ahead, many people will invest and join a multi-level marketing (MLM) group. These groups tend to promise a significant payback for a small upfront investment. Unfortunately, only a small percentage of these salespeople end up making money. These people are at the top of the pyramid, making money from those they sign below them.
10. Drugs
Substance abuse is a vicious cycle. People tend to do drugs to escape from their reality, which may be a financial situation or mounting debt. This then may turn into an addiction, which they spend more money on. Those addicted to drugs may steal and lie, anything they can do to get a fix. The good news is there is help available.
11. Rent
Being broke is not always due to bad financial decisions. Often, it is due to circumstances. Many people can hardly make ends meet and have to use their entire paycheck to keep a roof over their heads. Working hard and paying rent on time may help people in these situations find financial stability despite rising housing costs.
12. Flashy Vacations
Broke people will somehow have money for a trip to an all-inclusive resort or Atlantic City. It usually has to be something flashy, and it likely includes alcoholic beverages and gambling. Don’t get me wrong—everyone deserves a vacation. If you do not have the financial means to enjoy one, try to stay local, visit family, go hiking and camping, or take a day trip with friends.
13. A Bigger TV
Something that makes people look rich, like the latest tech or large TV, is always in a broke person’s “budget.” They tend to want to “keep up with the Joneses” and sometimes go over the top. Often, electronic and tech items offer payment plans, but they may come with a high interest rate, which will cost more in the long run.
14. Fireworks
If anything screams “broke,” it is a ton of fireworks going off in a backyard when it is not even Fourth of July. Where I live, on Long Island, NY, people will spend more on fireworks than home repairs. Fireworks are ALWAYS on sale; the more you buy, the more you save.
15. Storage Units
Yes, people in any economic class may need a storage unit. Broke people always seem to need one. It may be the lack of storage in their house or apartment, but it may also be a hoarding issue. Broke people often have trouble letting go of items they believe will have value one day. Bring it all to a thrift store, see if you can get any money, invest that money in something that will increase, and move on.
Looking back at these expenses that people manage to cover, we see a trend of addictive behavior. There are plenty of resources and groups available to help those who struggle with addiction. In addition to leading a healthier lifestyle, ridding one’s life of these habits will also lead to financial freedom.