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5 Reasons Why Employees Go Broke Before Next Payday

In our present society especially in the labor force, the rate at which most employees become financially broke before their next payday is seriously becoming alarming. Looking at the economic situation of every country, one would quickly notice the rise of poverty among the citizens. 5 Major reasons among other reasons have been identified as some of the reasons why employees go bankrupt.

What does it mean for someone to be broke?

For someone to be broke simply means they have no money, and their current financial standing is not buoyant enough to meet their immediate needs. It’s very painful for one to be without money just as it very painful also to stay without having a job or business that puts money into your pocket.

People go broke for so many reasons, reasons which are similar in some categories others and reasons which are also different from others.

We shall highlight some key reasons why employees and many other people go broke before the next payday.

Why You Are Broke Before Next Payday

1. Lack Of Financial Education

It’s very sad but true that many employees, businessmen, and women do not have the basic knowledge of money.

Everyone knows and sees money as either a note, a coin or anything we use in of goods and ser

Financial education is the ability for money users, spenders, investors, etc to understand the variables which include; personal financial management, budgeting, and investing. Financial education is the foundation of your relationship with money, and it is a lifelong journey of learning. The earlier you start, the better off you will be because education is the key to success when it comes to money.

Financial education is the only type of education that reasonably our institutions of the study has not been able to teach her student, leaving them with no knowledge of how to spend their hard-earned money.

It is necessary and important that anyone who wants to avoid being broke must understand the basics of money and how to manage it.

2. No Multiple Streams of Income

The quest for job security in the economy has made many people focus more on their jobs rather than establishing other tangible streams of income. Job security has made many remove their mindset from other sources of income that can help generate more money apart from their monthly salaries/wages.

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Creating multiple income streams allows an individual to have various cash flow sources that are coming in. This puts you in a better position to be prepared if one source of income fails.

In our present world economy, it is evident that a single stream of income is never enough to meet our financial needs as it is like throwing all eggs into one basket.

What does it mean to have multiple sources of income?

Multiple streams of income mean that you have income from several different sources. If one source stops or is eliminated you can rely on another source. Sometimes it takes a while to establish your individual streams of income.

It is strongly advised that everyone irrespective of their job positions or business should find or have another source of income to complement the others. To avoid dependency on a single source that cannot meet all needs.

For example, An employee doing a day job can save up some money and establish a Popcorn business, or the Chops business, an employee can join online affiliate marketing programs to start advertising or promoting other companies products and getting a commission from their sale monthly. No matter the kind of job or business one does, it is always possible to start another source of income to complement the other in case of the loss of a job or other business breaks down.

Also, read: 12 Hot Businesses You Can Start With Little Capital In 2022

3. No Budgeting Skills

Have you ever seen an employee or a business owner who sits with a pen and piece of paper to write down their scale of preference, to write down the list of things that are most important to them, and the amount of the money to buy or execute on it? That’s budgeting, and it is very necessary for spending control. Budgeting helps you to minimize the amount of money you spend on a commodity or whatever you feel you need to spend. Many people lack this skill, Some know about it but treat it as unimportant because it limits their use of cash for some particular thing.

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What Is Budgeting?

Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. Budgeting is simply balancing your expenses with your income.

If you want to have more money to spend later in the future, then you need to learn how to do budgeting. Because even a country administrative can not run without a budget from the senate. It is through the budget that all plan or project is being executed and the cost required to finance those projects.

Why Budgeting Is Important

Since budgeting allows you to create a spending plan for your money, it ensures that you will always have enough money for the unknown times and for the things you need and the things that are important to you.

Following a budget plan will keep you out of debt and also enable you to pay any outstanding debt you may be having.

4. Lack of Investment

Investment is the dedication of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is to generate a return from the investment.

An example of a long term investment in Real Estate Investment, to know more about real estate investment;

Also read: What Is Real Estate Businesses?

Many employees and business owners do not invest their money into any long-term business that can become a valuable asset to them in the future. They spend their finance on short-term investment that is not an asset.

To join a real estate investment company to secure a future investment for your business, yourself, or family, you can send an email to;

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[email protected] or visit www.overhpluspropertie.com to start your smart real estate investment plan.

The real estate business is the world’s top millionaires/billionaires business. There are various real estate companies you can sign up with to start your real estate investment journey, however, I will also recommend OVERHPLUS PROPERTIES LIMITED.

Overplus Properties has been in the real estate business for many years with their property investment spread all over Nigeria.

Examples of Investments

  • Stocks. Stocks of publicly listed companies are traded in the secondary market and the same can be bought by any individual. …
  • Bonds. …
  • Fixed Deposit/Certificate of Deposit. …
  • Options and Derivatives. …
  • Funds. …
  • Investment Trusts. …
  • Commodities. …
  • Real estate.

5. Unecessary Spending Habits

Another reason why employees go broke is that they spend and overspend money on things that are not necessarily important at the time. Many spend to gratify their emotions, many spend because they just feel like spending in other to show up to friends or family members, Some spend to show that they have money available. Some even spend on clothes, shoes, bags, houses, and many other things that are not important at the moment.

It is important that people control their spending power, and not allow money to control their will of spending. Sometimes the urge of spending money on something not needed might be there because it is just appealing to the eye.

spending less on things that don’t matter leaves more money for the things that do matter.

Here is a brief list of how your unnecessary spending Habits can be controlled

  1. Put any Bonuses Into Savings.
  2. Make Meals at Home.
  3. Make a Grocery List Before Going to the Store.
  4. Set a Shopping Limit.
  5. Clean out Your Closet and Sell What You Can.
  6. Cancel Club Memberships or Entertainment Bills.
  7. Embrace DIY Projects.

Also read: 12 Hot Businesses You Can Start With Little Capital In 2022

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