‘Why I Am Broke’ Searches Surge — 4 Reasons Why
Written by
Vance Cariaga
Edited by
Amen Oyiboke
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If you often find yourself short of money, you’re not alone. More than one-quarter (26%) of U.S. households are living paycheck to paycheck in 2024, according to Bank of America data. About 35% of households with yearly incomes below $50,000 live paycheck to paycheck — up from 32% in 2019.
Those numbers help explain why there has been a recent surge in internet searches that deal with being broke. Google searches for the phrase “Why am I broke,” have nearly tripled over the past month, according to data shared with GOBankingRates, while the phrase “how to save money fast” soared 318%.
Here are four reasons “Why I am broke” and such searches have skyrocketed.
Too Much Debt
One of the quickest ways to end up broke is letting your debt get out of control and a lot of Americans are doing just that. Total household debt in the U.S. hit $17.94 trillion during the 2024 third quarter, according to the Federal Reserve Bank New York. That figure is up from $11.7 trillion a decade earlier. Transunion found that the average consumer has more than $6,300 in credit card debt alone.
Jamie Wall, a personal finance strategist at Gamblizard, told GOBankingRates in an email that treating borrowed money as your own is “one of the most dangerous financial mistakes” you can make because it can turn small purchases into long-term financial burdens.
“Use [debt] only for planned expenses you can pay off in full each month and focus on creating an emergency fund to avoid relying on credit for unexpected costs,” Wall said.
Living Beyond Your Means
Another surefire way to run out of money quickly is to spend more than you can afford. This typically happens when your spending exceeds your earnings. Common mistakes include buying items you don’t need, purchasing a home or car you can’t afford, making impulse purchases or trying to keep up with friends or trends.
The latter problem is especially prevalent among younger folks, according to a survey by EduBirdie. It found that 42% of Gen Z shoppers give up essential needs to keep up with trends.
You Don’t Pay Yourself First
This problem was cited in a blog from Mutual First Federal as one of five reasons people always go broke. Building up a financial cushion is one of the best ways to ensure financial security — and avoid running out of money.
“Put money into your savings before you pay your other monthly expenses,” the blog said. “If you haven’t already, create a budget so you know exactly where your money is going. Then treat saving as a bill itself and soon you won’t miss the money taken out. This money can be used for emergencies, purchasing a future home, or saving for retirement.”
Too Few Income Sources
It’s great to have a steady source of income and even better to have more than one. The reason you’re broke might have more to do with the money you have coming in than the money you have going out.
Cutting expenses is crucial, but there’s a limit to how much you can completely cut out. Rising living costs can oftentimes outpace money coming in, making it difficult to save or break the paycheck to paycheck cycle. To get ahead financially, focus on finding ways to boost your income.
One of those ways is to find a side hustle that brings in additional money beyond your main job. You can also put money into passive income sources such as investments and high-yield savings accounts.
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