Are You Tired Of Being Broke Yet? Stop Making The Same Mistakes With Your Money

How much money do you really need to be happy?

Right out of the gate, let me answer that with an actual study…

According to an article in The Huffington Post, in which (editor) Kevin Short did his homework and determined the magic number for each state, the average target income is about $75,000.

The article breaks down the dollar amount, per state, per year that equates to financial nirvana. The point where you have enough money to satisfy your lifestyle and it’s essentially pointless to earn more.

Growing up in rural Georgia, where we used the poverty line as a jump rope, we got by on about 25-40% of that number for most of my life. Through intense research, I learned two critically important life lessons from that financial position:

1. It sucks.

2. I hate being broke.

The Magic Number

In my exuberant and clueless youth, while doing all my own math, I determined the magic number. It was a complex budgeting formula, developed completely within my own head, using no government or private funding.

I simply figured how much I was spending each month and decided that was how much I needed.

Yep. The total cost of my expenses meant I needed that much each month. I knew everything back then. The reality, I discovered after two or three, or maybe twenty five years, was that I needed MUCH more than I was searching for.

I realize that this is not much of a revelation to folks with money. Everyone else, the ones who have struggled for years, stay with me.

I also realized, after literally minutes of deep thought, that I was not the only one who believed that their magic number equaled their expenses. Where did we get this logic?

Maybe a school system that teaches calculus, but not how to read a mortgage contract? Maybe the same one that teaches sociology, but not social skills? Health and sexual education, but not family planning or household management. There is simply no balance. It’s like they want us to be peasants.

The actual word I have thrown around is drones. Worker bees that are smart enough to be productive, but dumb enough to just do what they are told. Educated enough to get a job, not enough to get ahead. Unless, of course, you don’t mind those amazing student loans…

Then there’s the abundance of financial wisdom thrown around by most churches. Here are two quick thoughts.

  1. Be careful about taking financial advice from folks who aren’t more successful than you. (Including your well-meaning pastor.)
  2. If your church manages money like a casino, run.

Casinos build huge glamorous buildings to draw you in. The lights and music and friendly people offering smiles create an atmosphere that takes your guard down and gets your money, so they can build more monkey traps. If that sounds like your church, move on.

But anyway, back to the original rant….

In case you’re one of the folks who really doesn’t understand the discrepancy between what it takes to survive and what you really need, let me explain why you need to produce some excess income.


Things break, clothes wear out, tires go bald, kids need braces… These are facts of life. By making a habit of setting something aside from every payday, life gives you some breathing room.

Ten percent is a great start, if you can do it. Shoot for a month or two of expenses in savings. It does more than help manage the unexpected, it also boosts your confidence.

Someone once told me that achieving a thousand dollar balance in his savings was his original primary goal. Once he reached it, the goal changed, along with his attitude. He said the ability to invest suddenly became an option.

It might sound like this is a remedial course on basic financial understanding. Maybe it is. Lots of us didn’t get this advice as kids. I didn’t. I struggled most of my life. If someone had shown me this thirty years ago, I wouldn’t be wearing some of the scars I earned in dangerous jobs. I wouldn’t have certain ongoing issues that money could have fixed. It would have made life much better for my family.

For that guy who was taught to save, it changed his life permanently. Now that advice is helping my kids. Let’s see what else there is…

Escaping Debt

Stop adding debt. Unless there is simply no way for life as we know it to continue, avoid new debt. I have learned this lesson, and ignored it. It gets more expensive each time.

I am now back on course with the most common formula for eliminating debt.

Pay the minimum, or slightly more, each month on all your debts while building up some savings. Then initiate the pay down strategy.

If all your debts, credit cards, and loans loans are costing you $100 each month, and you are adding another $100 to savings, plan to keep spending that much. Once you have a little breathing room in savings, take the money that was going there and apply it to the lowest balance.

So that $200 keeps going out each month until the lowest balance is paid off. Then move all of it to the next lowest balance and repeat the process. It might take a year, it might take ten. Just get it in motion.

Helping others

Stop wishing you could help your family and friends, get your affairs in order so you can. Think about the pre-flight speech on every airline.

“A loss in cabin pressure will cause oxygen masks to drop down to you. Put on your own mask before assisting others.” Why? Because you are a whole lot more useful when you are breathing on your own.

You can’t really help others much when you need the same things they do.


Do you really want to work your entire life? Don’t be delusional about this. Retirement doesn’t just happen, we plan for it. Meaning… We make a plan and work it. This does not involve guesswork. This involves using modern technology for reading and research, not just games and Facebook.

Maybe you need to invest in yourself first.

Do you need more education? Do you plan to start your own business? Be sure to do the homework before pulling the trigger. There are more free resources available right now than ever before in history. Just read. Follow folks who are doing what you want to do.

The biggest problem you will have, in adopting a new mindset, will be breaking the habits of the old one. Poverty trains us to think only of short-term solutions. When you can only focus on surviving until payday, it’s almost impossible to plan, save or invest.

But we have to. Not just for us. For our kids, our future and our sanity. Being broke is entirely too stressful to tolerate.

Search for mentors, either in person or online. Someone out there is already living the life you want and will probably tell you how they got there. Someone can draw you a map to get to where you want to be. (TED talks are a great way to expand your world.)

You have not, because you ask not. Or, possibly more accurate… You have not because you don’t know what to ask for, or where to search. Google is your friend. Ask for something. Search for your solution. Make some progress this year.

Feel free to comment on this one. What are you searching for? What have you learned that might help out the next guy?

M. Erik Matlock is a self-professed recovering knucklehead with more than 500 articles and four books in print. He shares his hard-earned wisdom at and through his books, which are available at Amazon.

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