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I was asked “I’m 26, I make $9,000 per month but can’t save money, why is that?”. Here’s how to break that cycle.

Broke businessman


The other day, I was asked this question.  “I'm 26, I make 9000 dollars per month, why can't I save any money?”



That made me stop and think a bit.  How many of us have been or are in a similar situation, making good money, even great money, but are still essentially living paycheck to paycheck?

I know I have struggled with this in the past, even occassionally feel that way now.  Perhaps you have as well or are still struggling with it.

I started my career making $4.25/hr ($8,840/yr), the then current minimum wage in Missouri. I was really struggling but managed to somehow make ends meet. If only I could make a little more… 

I took a position making $7.50/hr. Oh wow, that's over $15k/yr!!! I was rolling in the dough. For a little while. Then I started struggling, barely able to make ends meet. If only I could make a little more… 

A recruiter for McDonnell Douglas called me and made me what I thought was an insane offer. $40,000 per year. Oh my, what would I do with all that cash???  I was rolling in the dough. For a little while. Then I started struggling, barely able to make ends meet. If only I could make a little more…

Then I took another position making a little more…  Before long, I found myself thinking if only I could make a little more…

Does that cycle sound remotely familiar? Have you ever read about celebrities who have made millions but are now filing for bankruptcy? How does that happen???



Believe me, I've tried!  Unless you are fortunate enough to one of the small number of people banking millions every year, you are not going to out-earn what you can spend.  Even then, I've seen celebrities making millions go bankrupt!  It's the reason why some people will always be broke no matter how much they earn, they've never learned to control their spending.

Are you ready to break that cycle?  Are you tired of being broke, month after month, always thinking you'll be fine once you get that big commission, bonus, or raise?  Then keep reading.

I know I was tired of the cycle.  I finally figured it out, just like in any major game, a good offense without a good defense will never win.  You can score a lot, but if you never stop the other side from getting points, you'll still lose.  If you keep pouring water in a bucket with a bunch of holes in the bottom, it will always drain out.

Speaking of loops and buckets with holes…

I thought about hiring a professional to help out to help me plug my own holes, but a quick google search made me realize that I would easily pay a thousand dollars or more to get a comprehensive financial plan put together for my family.  I'd also be paying several hundred dollars every time I wanted to adjust it.  That's when I decided to invest in some courses instead.  Investing in myself has allowed me to increase my net worth by leaps and bounds over the last several years, adding over $100k to my bottom line.  Investing in myself is the single best investment I've ever made.

It is easy to get stuck in a loop asking where do I start and never do anything to break the cycle.  Let me simplify that for you.  Start with one of these two courses.  Do what they say to do.

The first course I recommend is Dave Ramsey's Financial Peace University.  This was what got me and my wife on the same page when it comes to finances.  You can buy the home study kit here.

The second course is called Budgeting for Budget Haters.  Having gone through both courses, I believe this is at least as good as Dave's excellent Financial Peace University.  It is actually better than FPU in several areas in my opinion, specifically as it gets into the details a little better, including things like a list of 40 Ways to Save on Monthly Expenses and 30 Ways to Increase Your Income which if implemented will more than pay for the course.  If you're looking for someone to hold your hand and walk through setting up your budget, this is what you're looking for.

This is built by Adam Hagerman, a Certified Financial Planner and Accredited Financial Counselor who has a Bachelors degree in Personal Finance, a Masters Degree in Personal Finance Education, and has worked his entire career helping people like you and me fix their finances.  You'd spend hundreds if not thousands of dollars to visit with someone like him for a little while, and he's put together this incredibly detailed program.

Going through his course recently has inspired me to get back to the basics in my own life when it comes to finances.  You can expect a new series from me on that shortly, make sure to sign up for our newsletter to stay tuned.

Bottom line, this guy knows what he is talking about.  He covers all the bases that you'll need to build a solid financial defense and plug those holes.  You can find out more here.

Yes those are affiliate links so I get a little money if you use them, but I have personally benefited by going through both of these courses.  There are many redundancies between courses so if you've been through one, you probably aren't going to gain a whole lot by going through the other unless you need some added motivation to get back into the swing of things as I did.

Are you ready to plug the holes in your financial bucket?  Or are you going to continue pouring money into the top hoping that at some point you'll be able to get enough money in there that the holes don't matter?  Don't get stuck in the loop, take the first step!

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Don Smith

Don Smith is a career and leadership coach helping people lead well at home and work. To work with Don, please click here.