6 reasons you’re broke, and how to fix it

Problem 1:  You’re spending too much money

Your expenses are too high, and you’re out of money by the time you get paid (or before).

How to fix it: Write down everything you spend for a month or two. See what you’re spending your money on, and any areas of spending you want to cut down. Then, draw up a money plan and do your best to stick to it. Start putting little sums aside for a rainy-day fund, for those desperate times.

Problem 2: You’re not earning enough

Your spending’s under control, but you simply don’t have enough money coming in.

How to fix it: Could you organise a pay review, ask for a promotion, or change jobs to one that pays more? Or could you move into a better-paying industry? Start a side hustle if you have the time and energy. Sell unwanted goods online.


Take another look at your spending. Review it regularly for more ways to cut down.

Problem 3: Your living situation is too expensive

Living costs are usually the biggest spend each pay cheque. Think rent or a mortgage, household expenses, food and transport. 

How to fix it: Cutting down your biggest expenses can make a big difference. If you’re renting, move to a smaller, or cheaper house, or move in with friends or family for a while. Shop around for better deals on power, internet, and your phone plan. Get savvy at the supermarket – plan meals, take leftovers for lunch, and shop for bargains. Could you swap your car for a bike or walking, or use public transport to save on fuel? Sell your car if you can manage without it. You’ll save a fortune on fuel, insurance and parking.

Problem 4: You’re keeping up with the Joneses

Are you buying fashionable clothes, and trying to keep up with the latest trends? Do you have champagne tastes on a beer budget?

How to fix it: Often the richest people in your community don’t look it. Millionaires often drive average cars, and aren’t flashy. Cut down on expensive brands for a while, and look at op shops, TradeMe, or cheaper clothing ranges. Look to build a ‘capsule’ wardrobe of just a few matching key items and invest in quality. View expensive trendy items as a treat, not as an essential.

Problem 5: You’re paying interest on credit cards and other personal loans

Paying interest is wasted money. Are you drowning in personal debt?

How to fix it: Get a plan in place to reduce your debt, starting with by paying off the debt that has the highest interest. Money Talks is a free budgeting service that can help. Could you consolidate all the debt into one loan? Sell items to pay off debt. Set goals and time frames for when each debt will be paid off. Once it’s gone, cut up your credit card and vow to get some savings behind you before you enter the debt trap again.

Problem 6: Your mortgage is too huge 

You’re drowning because your mortgage repayments are so high.

How to fix it: See a mortgage broker or financial adviser. You may be able to get onto a lower mortgage rate, or you could change to interest-only for a time, if you’re desperate. Can you get a boarder, flatmate, short-term tenant or exchange student in to help with rent and bills? If your adult children are still living at home, make sure you’re charging enough board. 

Published 17 October 2019

Pie Funds Management Limited is the issuer of the JUNO KiwiSaver Scheme. You can read our Product Disclosure Statement here.. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. It does not constitute financial advice. We recommend you speak with an independent financial adviser.