Habits of Broke People www.paypant.com

Last updated Mar. 2, 2023 by Peter Jakes

The term “broke” is a term used to describe people with no money. While some individuals lack money due to their life situation, others are in debt as a result of their bad behaviors and habits.

Being broke isn’t something that happens all of a sudden. It doesn’t just happen by accident. Instead, it is a result of bad financial choices made over time that eventually become habits that cripple an individual’s financial life.

And once these habits are set, like a thermostat, it becomes nearly impossible to stop them without deliberate effort.

However, escaping from the shackles of being broke starts with understanding the habits that got one into that situation in the first place. Therefore, in this post, we’ll discuss the six habits of broke people and how to deal with these habits. Escaping from this habit is crucial to attaining financial growth and is a lesson for all.

What Does Being Broke Means?

The word “broke” is derived from an old use of the word break, which means “impoverished” and connotes disgracefulness, helplessness, or embarrassment.

It’s more like an idea of action rather than circumstance — in truth; no one is born broke. It’s something that happens to an individual over time. By then, the person gets ruined financially or goes bankrupt.

However, being broke doesn’t necessarily mean one has zero dollars; it isn’t synonymous with being poor. Being poor means an individual never had money to begin with, while, on the other hand, going broke means a person lost the money he once had.

Being poor is living with the daily agony of not having enough money to buy groceries or having to decide between buying food and paying the rent.

A broke person typically lives from paycheck to paycheck, with debts hitting from every angle. Most often than not, that person can purchase a $75,000 house because they can pay in installments but cannot handle a $1,200 emergency. In simple terms, a broke person cannot afford essential things and is living in debt.

Now that we’ve established what being broke is, let’s delve into the habits of financially broke people:

1. Broke People Live on Credit Cards

One of the common signs broke people exhibit is their overreliance on credit cards. This is usually caused by their lack of patience to save money to purchase the things they need. Consequently, they spend all they make without saving a single penny for tomorrow.

Some may even go as far as spending more than they even make. And when things go bad, they start to rely on debt. And debtors, as you may already know, are always in financial trouble. Using credit cards is one easy way to fall into debt.

Broke people typically resort to using their credit cards to meet monthly living expenses. And they tend to pay interest instead of earning it. So they put it on the credit card until it gets maxed. But the truth is the interest rates are so high that they could live on credit card debt unless they take action to pay them off.

According to financial experts, credit card debt is the worst hindrance to financial success and is one of the common reasons why so many goes broke. The fact that getting off credit card debt isn’t easy makes it difficult for people living in this kind of debt to attain financial freedom.

2. Broke People Don’t Plan For The Future

Another typical sign broke people exhibit is their lack of concern for their future. They believe in “now” and don’t consider tomorrow when spending or planning how to spend their paycheck. Their belief that tomorrow seems too far away is responsible for this mindset.

You can find out by asking them about their plan for the future, what they envision, their financial plan, and their dream career.

They usually don’t have intelligent answers to these questions because they don’t have one. They tend to live every day as it comes, and as a result, they don’t have anything to look forward to.

More so, because of their mindset, they don’t consider saving or budgeting. Instead, they spend as money comes recklessly, without any plan for the future. Similarly, their immediate pleasure is their major concern, and as a result, before the end of the month, they are left penniless – having nowhere to turn to.

3. Broke People Don’t Spend Wisely

Common characteristics of financially stable people are their decision to spend only on things that matter. On the other hand, broke people are always in the habit of spending on things that are not of “value” and not worth spending on.

Unlike designer clothes, the latest cars, smartphones, etc., things like homes, stock market funds, gold, trucks, etc., are worth spending on.

Most of these things (not worth spending on) depreciate over time and might require you to keep spending on them to keep up with the trends. In the end, you might end up with the habit of upgrading your stuff regularly, thereby losing lots of money.

So instead of spending money on things that appreciate, broke people are focused on consuming things that depreciate. A broke person would rather spend money buying a new car that depreciates in a few months instead of putting that investment on a down payment toward a house. They prefer to look good on the outside at the expense of their finances.

4. Broke People Depend on Gambling As A Source of Income

Another common habit of broke people is their overreliance on gambling. Although it pays in some cases, gambling is something that slowly eats at your finances even without you easily noticing. Moreover, it’s an addiction that is hard to overcome, even if it must have dried up your finances. It drives people to live in debt, especially when they cannot afford to pay it back.

Similarly, broke people are mostly into the lottery probably because they believe that one of the ways to get rich is by buying lottery tickets. They hope that if they clinch the lottery, they’ll finally buy their dream house, quit their job, and spend the rest of their lives happily ever after.

Even when they’re aware that their chances of winning are slim to nothing, they gladly spend their money in the hope of that fantasy. But after a point in time, just like gambling, it becomes an addiction, and they’ll become prone to getting into debt for buying lottery tickets.

Even worse, some lose everything they own by falling into the infatuated trap of gambling, spending the rest of their life in utter poverty. And in the worse scenario, they lose their job, home, and even marriages due to their gambling and lottery addiction.

5. Broke People Don’t Save

Saving is one of the top financial habits of successful people. Living without saving is like living without insurance – you wouldn’t have anywhere to turn to when things become difficult. And this is when life becomes difficult for broke people.

Furthermore, they generally live from paycheck to paycheck. And as a result, they’re in a constant scramble to make ends meet and are always without enough money to cover the necessary expenses. As they don’t take saving seriously, they have to incur huge financial crises until they get their next paycheck.

But as soon as they receive their next paycheck, they’ll spend the majority of the money. The moment they get paid, they’ll rush to the stores to purchase groceries and accessories even without a budget or money set aside for savings.

Likewise, they don’t have emergency funds or savings accounts to help them survive difficult situations such as job loss, health challenges, travel expenses, and so on.

6. Broke People Spend More Than They Earn

Another way to identify broke people is their tendency to spend more than they earn or make. They constantly raise their expenditure which only works to accumulate debt and leave them stuck in the echelons of poverty. Even when aware of this danger, they don’t seek ways to earn more or spend less.

And at the end of the day, they’ll be left without a penny, allowing them to turn towards debt. And the more debt you take, the liker the chances of becoming broke forever; because as you settle the debt, you’ll need to borrow another that’ll sustain you for the month.

Their tendency to remain in their comfort zone without seeking other ways to earn more income is also responsible for this. Consequently, they won’t have enough money to meet their lifestyle, settle their bills, and cater to all their expenses.

The Bottom Line

It can be challenging for broke people to regain their finances and start living a healthy financial life. However, they can escape the shackles of being broke with discipline, dedication, and consistency. But first of all, they must accept that their lifestyle, choices, and decisions are the causes of their financial predicament.

Depending on their seriousness, it may take 6-14 months to attain financial freedom and start living a life with enough cash.

The five most essential factors in escaping the broke syndrome are saving, having an emergency fund, budgeting, spending wisely, and having multiple income streams.

Here are habits often found in broken people. These habits can enable you to identify broke people quickly.

Other Common Habits of Broke People


Lack of Investment

Broke people do not make plans for retirement savings and investments. They also ignore business ideas with the potential to generate good income.

However, broke people are always ready to spend their income on trivial pursuits. They do not make plans for expenses, and they do not think about their future.

They Take Payday Loans

The safe Small-Dollar Loan of the Pew Charitable Trust conducted research that revealed that over twelve million Americans take payday loans, and have paid an average yearly interest of 391 percent.

It was discovered that over $40 billion is issued yearly in loans and that over 22,000 payday loan outlets exist in America. This shows that there are broke people everywhere around you.

Only people with no source of daily income reach out to payday loans.

Habits of Broke People www.paypant.com

They live in an impoverished Rented Apartment.

A few broke people may often find themselves staying in an impoverished rented apartment.

They cannot afford to pay for well-furnished buildings and so decide to settle in buildings with no or poor amenities.

Stay in the Company of Broke People

Broke people often have given up on aspiring to be rich. And so they have the habit of keeping company with people of equal financial status with them.

Frequently Asked Questions


What causes people to be broke?

The majority of people are broke not as a result of their credit card debt, but due to their desire to spend money on irrelevant human desires.

In addition, they take out loans to acquire goods with depreciating value, like automobiles, recreational vehicles (RVs), boats, and more.

How Do You Live Being Broke?

To live with being broke, you have to carefully examine your take-home wages and expenses in order to afford to live through the month.

You can also seek for jobs, or start a freelancing career.

Why do most people stay broke?

Most people stay broke due to their lack of budgeting. According to a U.S Bank Research, only 41% of Americans adhere to a budget.

How Much Should You Make At 35?

As reported by the U.S Bureau of Labor Statistics, the median annual wage for people below 35 is $46,852 but the annual wage for people above the age of 35 is $58,812.

How Can a Poor Become Rich?

A poor person can become rich by avoiding or paying off their debts, spending low, and by investing.

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