I’m Broke

By | June 22, 2018

I had trouble deciding what to call this post.  At first, I was thinking about titles such as “living paycheck to paycheck” or “bad spending habits.” But rather than color my situation with nice language, I’m going to call it for what it is.  I’m broke!  I don’t have any money and I don’t get paid until the end of the month.  Let’s examine my situation further to figure out why I’m broke.

Bad Spending Habits

There is no question that one of the main reasons why I have no money is because I have bad spending habits.  Let’s just take this week as an example in terms of where my money went.

Rental Car

The first thing I did was rent a car that is costing me $500 total for the week!  I’ve never paid that much money before on a car for one week.  I didn’t have any special bells or whistles, but I did get the rental car’s insurance.  Why?  Because I just didn’t want to deal with the hassle in case something happened.  Been there, done that.

Now, did I have to rent the car?  Not really.  It would have made life much more difficult, but renting the car makes things convening.  I’m visiting the U.S. this week and it would be very difficult to get around otherwise.

But, if all I did was rent the car, I would not be broke.  However, unfortunately, that is not all I did.

Lunch

Well, we all know where this is going.  I’ve been to Applebees virtually every day this week spending $20 per day.  That’s just stupid and a waste of money!  Maybe I’m stressed or something and feel the need to waste money to relax.  I don’t know, but I do know that this madness has got to stop!  I also get the same thing every time I go to Applebees, which is also not good for my health.  Variety is the spice of life as they say.

Uber

Even though I rent a car, I take Uber rides to locations to go to a club, bar or lounge in case I decide to drink.  I don’t want a DUI, but I’m also spending money on transportation costs when I already spent a small fortune renting a car.

Please, somebody, stop me!  It’s only for a week though – or a least that’s what I tell myself.

Casinos

Well, this one surely takes the prize.  Let’s pretend that the first day I went to the casino was Monday.  My trips to the casino have been so bad that I don’t think I want to remember how many times I’ve gone.  But, I’ve lost consistently about $120 a day.  So, that’s $120 on Monday, $120 on Tuesday and $120 on Wednesday, and Thursday.  I’m posting this on a Friday.  For some reason, I think $120 is an appropriate amount.  Really, I would have liked to gamble more, but I just didn’t have the funds.  I also had to play hide and seek so to speak trying to find money to go to the Casinos.  In any case, by my conservative calculations, I’ve lost a minimum of $480 at the casino since Monday.  This does not include the $5 I spend each time withdrawing $60 from the ATM inside the casino.

Yea, all bad decisions, I know.  But, supposedly, I’m just paying for entertainment!  That’s bull!  Tuesday was so disappointing.  I was up by like $70, but did I walk away?  No.  I lost it all!  I was so upset that my last two bets were big ones and I lost them both.  So much for my good luck.

And I don’t want to hear how much I could have made had I decided to put that $480 in the stock market.  I guess I could do the math but That would just make me feel worse.  Haha.

To fund my gambling habit, I’ve pretty much depleted my “emergency fund.”  Thankfully, there was only $300 in that fund.  Oh well.

Mom’s Surgery

This really put the nail in the coffin.  I needed to help my mom out with an eye surgery that’s coming up.  She had trouble coming up with the copay so I contributed $900 towards the co-payment.  My brother will be contributing some money as well.  Sufficed to say that $900 is a lot of money for me, and essentially represented the last money I had.  But, there are things more important than money and I will choose my mom over money every time!

No Budget

Perhaps I should start following Dave Ramsey’s advice more.  There’s nothing like the baby steps to help keep your financial life in order.  Dave teaches that you should have $1000 in a starter emergency fund as baby step 1.  Once you complete that, then you should pay off your debt from smallest to largest in Baby step 2.  He has 7 baby steps to follow.  But, in baby step 2, in order to pay off your debt, he recommends having a budget and the discipline to stick to it.  Sound advice.  But it’s advice I don’t follow.

I will teach you to be richI follow Ramit Sethi’s approach to spending as he documents in his book I Will Teach You To Be Rich.  I also detail his approach in several posts including this one I wrote in 2016 about my Conscious Spending Plan.  As a quick reminder, the approach suggests that you don’t need a budget.  You should ensure that the essential expenses are taken care of and then use the rest to enjoy life.  For me, that would mean my monthly contributions to my retirement accounts, Dividend Portfolio, and automatic payments to my mortgage and debt. In the interest of full disclosure, the picture of Ramet Sethi’s book is an affiliate link.

The problem with this week (and this whole month) is that I was unable to make my minimum monthly contributions to my Dividend Portfolio.  That’s in part due to the fact that Dividend Portfolio Is Moving to M1 Finance.  But, it’s mainly due to the fact that the money that I would have contributed to my essential accounts have instead been used to fund my lavish and bad spending habits.

After I return the rental car, return home overseas, and complete the transition to M1 Finance, I’m hoping things will be back to normal!

Credit Card Debt

So how do I still bye food when I’m broke?  The good old credit card.  My balance right now is more than half of the $3000 maximum card limit.  I hope to pay it off soon, but I’m afraid that my credit score will take a hit now that I will carry a balance from one month to the next.

I have no one to blame but myself.  In, fact, I still plan on going to Barcelona this summer, and I have no clue where that money is going to come from since I’ve used up all of my extra funds.



Line In The Sand

Despite all the competing interests for the spending of my money, there are fundamental things that won’t change.  I haven’t sold any stocks and have zero plans to do so.  If it weren’t for the move to M1 Finance, my monthly contributions would have remained the same.  I plan on resuming those contributions asap.

Although I’ve depleted my Digit and Qapital savings as well as my checking and savings accounts, I haven’t touched my retirement accounts or any account associated with my Dividend Portfolio.  The key thing now is for me to replenish my reserves.  I expect to bring my credit card balance down to $0 once I get reimbursed for some work expenses, but that’s still going to leave me with zero cash.  I just need to better control my spending for the remainder of the month (starting next week) and for July.

Conclusion

It’s very clear.  If I have extra money, I’m going to spend it.  That’s why I ensure that the fundamentals are taken care of before I engage in discretionary spending.  It’s foolhardy for me to think that I can save money like most people.  Sooner or later, it’s going to be gone.  The idea that I’m going to have to put 3-6 months of expenses (outside the market) only as an emergency fund is a hard pill to swallow.  But, I also know that Rome wasn’t built in a day.  If achieving financial independence or early retirement was easy, everyone would do it.

Still, I’m hoping that this week of mostly absolutely wasteful spending is an anomaly that won’t repeat itself anytime soon.

I’m interested to know your thoughts.  Let me know by commenting below.

36 thoughts on “I’m Broke

  1. Tom @ Dividends Diversify

    DP,
    I sure wish you would have put the gambling money into your dividend stock portfolio. Versus gambling, it’s rigged in your favor, not the house’s.

    All I have to say is the first step in solving a problem is recognizing there is a problem. You have clearly done that.
    Tom
    Tom @ Dividends Diversify recently posted…Faster than the BearMy Profile

    Reply
    1. Dividend Portfolio Post author

      Hopefully there aren’t too many more steps to solve it.

      Reply
    1. Dividend Portfolio Post author

      Just a week of too much fun p2035. Thankfully, all temptations will be removed next week.

      Reply
  2. dividendgeek

    We have been having exorbitant monthly bills too. It all started with our vacation and ever since we have not recovered. Hoping the months ahead will return us back to our routine. Hold on buddy!
    dividendgeek recently posted…Top Canadian Dividend ETFsMy Profile

    Reply
    1. Dividend Portfolio Post author

      I hope she does get better myself. My investments are currently automated, but not my savings. I think I had an off-month because of the disruption in that automation given the transition from Capital One Investing to M1 Finance. Plus, the opportunities I had to go casino gambling etc will no longer present itself for the next few weeks, so not worried about wasting my money there. But, we will just have to see how July goes. It’s already shaping up to be an expensive month given the fact that I started paying back my cell phone bill and will be on vacation during that time.

      Reply
  3. Dividend Diplomats

    I’m sorry to hear about the tough experience here Dividend Portfolio. The important thing is you figure out any important lessons, takeaways, and learn to make yourself a better person, saver, and investor. If having a traditional emergency fund is not for you, let’s look at other ways that will work. There are plenty of stocks that you could invest in, PG, utilities, REITs, etc., that could be your “emergency stock.” That way, if something comes up, you have no problem selling the stock. You won’t have immediate access to the funds, but you could have the cash within three days once your trade settles and you can transfer your cash to the bank account. The temptation to immediately spend won’t be there but you know you have some stocks you would be happy to sell if needed. Maybe its is the best of both worlds.

    You’ll find the right system soon and get back into the swing of things!!

    Bert

    Reply
    1. Dividend Portfolio Post author

      To some extent, I view the funds in my Acorns account as being part of my emergency fund. The account balance is just over $1000. Still, I like the idea of having reserves not invested in the stock market, but also not subject to my spending impulses.

      Reply
  4. Mike at Balanced Dividends

    Hey Glen –
    It’s easy to sometimes have an off month or week. It’s happened recently for me as well.

    Example? Specifically calories. Everyone’s calorie level can vary greatly. I’ve never come close to burning 1400 calories in a single 60 minute workout (usually closer to 600-800). However, I’ve found I don’t burn nearly as many calories skipping a workout and drinking 3 beers on the couch. In fact, not only did I miss an opportunity to burn calories, I tend to find myself making even poorer nutrition decisions when not making it to the gym. If I want to eat like crap after class, I will do it occasionally. At least I burned something.

    In other words, whether money, calories, or anything else, try to ensure one decision doesn’t continue to result in a series of other actions (or inactions) that you might regret later.

    Regardless, you got M1 coming soon – I’m looking forward to hearing more, as I did check them out and I’m strongly considering them as well. – Mike
    Mike at Balanced Dividends recently posted…Orangetheory Fitness: It’s All About That Base (Pace)!My Profile

    Reply
    1. Dividend Portfolio Post author

      Once the transfer is complete, I will talk more about M1 Finance. I’ll try to do a complete review whenever I post about it again. Thanks for the advice.

      Reply
  5. Money Hungry

    DP, Everybody slips up from time to time. You have recognized the problem and now you can make a plan to fix it. Hell I’ve blown some money at the casino too and I know now the feeling of winning goes away after about 1 minute, but the feeling of losing money sticks around for much much longer. Brush yourself off and get back on that FIRE train!!! *double finger pistols*
    Money Hungry recently posted…Dividend Income May 2018My Profile

    Reply
    1. Dividend Portfolio Post author

      Haha, will do MH. That’s the plan anyways.

      Reply
  6. Passivecanadianincome

    hey port.

    sounds like you went on a bender! ahhh you got to have fun once in awhile. atleast switch up your restaurant. haha

    watch the casino though, im not a huge gambler and essentially think what ever money i bring in will be gone. aka play money.

    going 5 days straight? thats to crazy. nice that you helped your mom out, thats money well spent.

    pay yourself first and if cash burns in your pocket invest it right away. emergency funds are overrated that what credit cards and line of credits are for. just pay those off asap.

    anyways shit happens, now go out and fix it.
    haha cheers man
    Passivecanadianincome recently posted…Comparing Canadian Banks / New BuyMy Profile

    Reply
    1. Dividend Portfolio Post author

      Rob, sounds like you nailed my thought process right on the head. If I originally planned to spend $500 at the casino, in my mind it makes no difference if I go one time for week and spend $500 or 5 times a week and spend $100 each time. That’s sort of what happened last week. Before last week, it’s probably been a year-and-a-half since I’ve been to a casino.

      The cash I burnt can generally be thought to be play money. Usually, any money I burn like that is discretionary income. It’s just that my discretionary income was higher than normal since I had to put a pause on investing in Capital One Investing waiting for the transfer to be complete. The way I handle money is exactly as you describe. Once I get it, I pay myself first! Then, I spend the discretionary income however I please. I just felt a little bit guilty since last week, the amount of money I spent was higher than I normally do, and felt more like a waste than anything.

      I share your point on credit cards and, to some extent, that’s what I have my credit cards for. I have three credit cards. Two cards I absolutely don’t use, maybe except once a year or so to remind the card that I’m still an active customer. Even for the card I do use, which seems to be on a monthly basis, I try not to use it, but only do so as a last resort.

      I don’t plan on repeating last week anytime soon, except in July when I’ll be on vacation for TWO weeks! If you think I’m broke now, I’m probably going to be in so much debt after then! Haha. But, regardless, it’s nothing that I can’t handle or will otherwise lose too much sleep over.

      Reply
  7. Dividend Daze

    I know a lot of people who do automatic banking and basically money from each paycheck gets set aside in an account that you don’t touch. There are a few apps that do that as well. Or round up your purchases to the nearest dollar and puts that into your saving. It is small amounts, but they add up and may help to build up the foundation of a savings account.

    Reply
    1. Dividend Portfolio Post author

      Thanks for the suggestion Daze, but I already use a few of those apps. To a certain extent, they help. The money I got for my mom’s surgery came from the savings from one of those apps, so they definitely have their uses.

      Reply
  8. DivHut

    That was some spending spree you mentioned. Rentals, casinos, the food and more. Yes, a lot of it, as you mentioned, was bad decision making, especially at the casino, but I do give you credit for sharing and admitting your errors. How many others spend as you have described and are totally oblivious to what they have done. At least you know your errors which can only guide you towards better decision making in the future.
    DivHut recently posted…Recent Stock Purchase June 2018My Profile

    Reply
    1. Dividend Portfolio Post author

      Ya, paying attention is probably half the battle. Hopefully, July will fair better regarding my spending spree – but with a vacation coming up, I doubt it.

      Reply
    1. Dividend Portfolio Post author

      But a lot less instant gratification which is what the casino gives you when you win – or a heart burn when you lose — but I do agree with you.

      Reply
  9. Mr. Robot

    Wel confessing is half the battle and you already did that. Similar to what the people above said. I think it’s great that you helped you’re mom and kudos to you for that.

    Now with that being said, here is some tough love: You talk about fun and some instant gratification. But in your entire post and vibe to it, I doesn’t sound like your REALLY had any fun or created some fun memories. You say and know all the right things that you should do, even use some apps to help you, but that’s worth nothing if you don’t actually DO it.kick your butt into gear and go for it!

    Mr. Robot recently posted…This is my (first) extra-large buy for June 2018My Profile

    Reply
    1. Dividend Portfolio Post author

      I didn’t have that much fun as I was working most of the time. The real fun starts in July when I go to Barcelona on a real vacation – not the working vacation I just had. God only knows how much spending I’ll be doing then. Thanks for the tough love.

      Reply
  10. DividendSolutions

    Hey DP,

    sorry to hear your story of “bad spending”—takes courage to post this. you are a reflective guy and i don’t believe that you’ll always fail at saving. Your going through a rough time, but you’ll come out of it. Never quit!! Think of your fantastic quotes for example.

    And for saving set small realistic goals. step by step. Success fuels success and boost your confidence that you can save a decent amount… If you can save an extra 50$ a week this is something to build on…

    Hope you have a good July,
    Take care,

    DividendSolutions

    Reply
    1. Dividend Portfolio Post author

      Thanks DS. I hope July works out good for me too. It’s a different dynamics with various competing interests, but savings are right at the forefront of my mind.

      Reply
  11. Evan @ MyJourneytoMillions

    I know I personally have to keep myself checking-account poor to make sure I don’t get too reckless with spending. I always get so mad at myself when I have had a particularly bad streak with gambling, that i just wasted money. Usually sets me straight for a few months
    Evan @ MyJourneytoMillions recently posted…July 2018 Net Worth UpdateMy Profile

    Reply
    1. Dividend Portfolio Post author

      Exactly. Same here Evan. But, because of my overspending, I decided to cancel my vacation plans to Barcelona, which I will probably talk about in a later post. I definitely have to keep my checking account poor otherwise I too will recklessly overspend.

      Reply
  12. gonorthbalance

    You have guts man to confess all the problems!
    I believe, that step by step you will work things out. Start little by little and you will finish hard. Set clear goals and follow them. You know how it works as you for sure have great financial literacy.

    Reply
    1. Dividend Portfolio Post author

      Thanks GNB. You’re right. I just had a relapse. Right now I’m on vacation and I canceled my plans to go to Barcelona because I realized that I would be funding it with my credit card. It sucks, but at least I don’t have to spend the next two-three months paying for two weeks worth of fun. As you say, I’m taking it little by little. Thanks for stopping by.

      Reply
  13. Dividend Dozer

    I agree with GNB – great job admitting where the funds are all going and recognizing that there may be better uses for them! I will just share my little Vegas trick. A ticket to a Vegas show like Cirque may be pricey, but I personally can lose much more than the cost of a Cirque ticket in two hours at a blackjack table. I’ve shifted my Vegas expectations away from gambling and instead to doing shows and possibly going to Zion Park – not too far away.

    Reply
    1. Dividend Portfolio Post author

      Definitely a great strategy DD. Usually, when I go to casino, I only take cash and a certain amount of money I’m willing to lose so that once it’s gone, it’s gone, and I don’t have the ability to get more from the ATM. I just had a crazy expensive week that was outside of the norm, but thankfully, it was outside the norm!

      Reply
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