Lessons From Broke People
Financial,  Personal

Lessons from Broke People

In life, you will meet many people from a variety of financial backgrounds and habits. Today I want to talk about broke people and the lessons we can learn from them. Working in the financial world has taught me a lot about how various people handle their money. Now, I want to share some of those things that I’ve learned with you all.

1. Eating Out is Costly

These days, a fast food meal can easily cost $8-10 a person (A). Or maybe you try not to break the bank and keep it around $3 (B).

A. Five days a week x $8-10 a day = $40-50 a week or $2,080-2,600 a year!

B. Five days a week x $3 a day = $15 a week or $780 a year!

Making sandwiches at home

What if you made sandwiches at home? (This is based on local prices for me and items I get. I tend to stick in the middle of “affordable, but still good quality” products, so this could easily be made cheaper).

$1.88 – a loaf of stone ground whole wheat bread (makes nine sandwiches) – $0.21 per sandwich

$3 – 1 lb of lunch meat -whatever is on sale that week (makes five sandwiches) – $0.60 per sandwich

$2.50 – a pack of 10 slices of cheese (makes 10 sandwiches) – $0.25 per sandwich.

Condiments – usually sauces, such as mustard or mayo can make enough sandwiches that it’s just pennies added.  We’ll just say $0.05 for fun.

Additional toppings – usually I look and see what vegetables I have left over from other meals, such as salads/lettuce, and cucumbers. I never buy these items for the sandwiches. But I do buy a lot of veggies for dinners so sandwiches make a good way to clean up the leftover fresh vegetables before they go bad!  So, this cost will not be calculated. However, if you buy certain ingredients specifically for sandwiches, you’ll want to calculate it.

Grand total $1.11 per sandwich = $5.55 for 5 days a week = $288.60 per year.

That’s an annual saving of $491.40 compared with the “cheap” eating out option, or a savings of $2,311.40 if you average $10 a day eating out!

Lunch is an easy example to break down. But if lunches can save you this much, think of how much you’d save eating dinner at home too!

2. Those Little Transactions Really do Add Up

A long time ago, I had a man that once asked me where all his money went. I started listing off transactions and he stopped me saying, “I know about those. What are the larger transactions? Those are just little ones, so where’d my money go?”  “Sir,” I said, then took a deep breath. “Other than $50 at the gas station, there are no large transactions.”

Breakdown of the little transactions

$4-5 a day at coffee shops, $10 a day at fast food joints, $5-10 frequent stops at gas stations (not for gas), $10-15 at Walmart a few times, $10 transactions on Amazon, two restaurants transactions each in the $30-40 range, a few trips to the dollar store, and one trip to a thrift store. By the end of it, he had spent almost $400. While this week was extreme for him, he still, like many of us, has a tendency week to week to overlook the little transactions.

We all have that dollar amount that tends to stay below our radar. For him, it was anything $40 and under. For others, it might be as low as $2-3, while some have it closer to $100. I think it’s important to learn what that amount is for ourselves so we can learn to adjust the bad behavior that can happen because of it.

Rethinking the small and insignificant transactions

Remember, even just one $10 transaction a week that is “too small to be significant” adds up to $520 a year. Not all small transactions are bad, but when you run the risk of them adding up to a significant amount, you need to think a bit more about it. Ask yourself, “does this truly add value to my life? To my current and future circumstances?”  If you realize it’s an impulse purchase and that three months from now you’ll probably forget about it, then don’t waste your time or money purchasing it.

3. Subscriptions Will Bite You in the Ass One Nibble at a Time

These days, it seems that every company wants to sign us up for subscriptions. Remember how in #2 we talked about little things adding up and small transactions staying under our radar?  These companies know that! They intentionally keep their subscriptions low enough that we easily think, “no big deal.” Just four monthly subscriptions of $8.99 are $431.52 a year. I am not saying that subscriptions are a bad thing! But don’t just sign up for something because it’s a good deal. Truly evaluate the product. Will you benefit from it? Will you actually use it (and use it enough to justify the cost?)?

Tips to handle subscriptions wisely

If they have a trial period, great! But DO NOT FORGET to cancel before they start charging you. And every 6-12 months, sit down and reevaluate each subscription you have. Have you used it? Do you feel you use it enough each month to justify the cost? If not, then cancel it.

Hulu and Netflix are excellent examples! If you have cable or dish, why are you paying for Netflix and Hulu too?  Personally, unless you are a sports fanatic (though I think there are alternative options for that too!), I feel like it’s worth paying for higher speed internet, drop the cable/dish, and sign up for Netflix and/or Hulu for the TV Shows (I feel like they lack in the movie department) and rent movies from Redbox once in a while. But that’s just me.

4. Keeping Your Card on File Makes Spending Money Too Convenient 

When I help people that are frustrated due to overdrawing their account, it is often due to spending too much on things they have their debit/credit card linked to. Xbox, Amazon, iTunes, Google Play…just to name a few. The more convenient it is to spend your money on impulse, the more you are actually going to spend money. Imagine, you are in the midst of an intense game, you are so close to the next level, but you just died, it was your last life, and now you have to wait for more lives, which takes 20 minutes. But wait! A button pops up and says, “Ten more lives for $1.99!!!” How can you say no? It’s only a “little transaction” (see #2), and you just have to click a single button and you are back in the game!

The same goes with Amazon or Xbox. When you want something, it’s right at your fingertips. You click on that wonderful button that lets you pay ASAP so you can get your purchase right then and there (or at the longest, 2 days for shipping). When you don’t have to get your ass off the couch to find your wallet and then type in your payment information, you aren’t given the chance to slow down and think about whether or not you truly need that purchase.

Issues that arise when someone uses our phone

The other issue with having payment information on file with accounts like Google Play and iTunes is that when someone else borrows your phone, they now have access to using it! Perhaps you think no one has access but here are a couple of questions. Do you have kids/grandkids? If so, do you ever let them play with your phone when you want them to leave you alone? Kids are smarter than we give them credit for. It doesn’t take long for them to realize they can pay for games when they play on your phone. Do you have a roommate? Many times, the people we live with, know us well enough to guess our passwords or to know what devices we don’t have passwords on and what accounts we stay logged in to.


There are many more lessons I could probably share, but these are the four that I’m sticking with for today. These are the four that I see the most on a day-to-day basis with regard to spending habits. So, pack your lunch, watch out for those subscriptions, do what you can to avoid impulsive buying by remembering that little transactions DO add up to large amounts, and make your payments less convenient.

Do you know of additional bad financial habits that keep people broke? Or tips on how to overcome poor financial habits? Share them in the comments below!

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