Defining Broke

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Pleas sir, I want more!

Last week I read an article on LearnVest, which I can’t seem to stop thinking about. It’s called, Why You’re Not Actually Poor.

The author makes an argument that when we complain about being broke or poor, we are actually not REALLY broke or poor.

“I’ve seen women here on LearnVest and in my daily life complain about making $40,000 a year, saying that’s not enough to support themselves (to which I would add: “in the lifestyle to which they’ve become accustomed”).”

She goes on to say:

There are middle class people who say they just can’t live in D.C. or New York City on $40,000 a year, but there are also people in those same places living on minimum wage. Take a look at the invisible people around you who make your life tick–your cleaners, the person making your drinks, your interns–and imagine how they make ends meet.

It’s a choice that you make to feel disadvantaged. If you make $33,000 a year, the truth is, you are actually in the top 50% of wage-earners.

Basically, the gist is that you really aren’t that broke. That 40k a year in an expensive city does make a broke girl not.

I sort of get what she is trying to say. Yes, there are people in much worse situations, and that it’s a good idea to keep your own reality in perceptive, but as humans we are much more complicated than that, and you can’t just say someone making a pretty crappy salary in an expensive city should just be OK with that. Everyone has their own definition of broke.

Let’s take my situation. I made around 72k at my last full time job and live in LA. I was very comfortable with the life that salary provided me. I had benefits, saved for a rainy day, and participated in my company’s 401k plan.

Last year I brought home 46k in freelance work, and that was double what I made in my first year of freelancing. Ouch. No wonder I blew through my emergency fund.

Did I make stupid financial mistakes during that time? Absolutely! Nothing I can do about it now though except learn from my mistakes. Should I be satisfied and content with 46k, hell no! Sorry, but no. Not in this city!

Because to me my definition of being broke has to do with my life choices. I’ve learned to live with a lot less and appreciate more of what I do have, but I want more out of life than money can currently provide. Is that wrong?

I want a car (used, slightly beat up, old-don’t care as long as it runs), a safe and comfortable place to live, some decent clothes and beauty routines, hobbies I enjoy, traveling, and the occasional splurge on a massage. I’m not asking for a mansion in Beverly Hills.

Maybe it was my comfortable middle-class upbringing that I have to blame for making me so entitled. I’m not sure, but what money represents to me is freedom to make choices of how I want to live.

I’m sure the author of the article would also frown upon the fact that I consider myself to be “broke” even though I have between 100 and 200k in investments for retirement. But to me, that money is off limits for either retirement, or possibly buying property someday. And I’m nowhere near close to being happy that at 41. I really should have more in that account.

So again, am I one day away or one paycheck away from living on the streets? No, of course not. But I’m not going to lie and say I’m going to be happy with what I’m currently making either. It’s what motivates me to push ahead and keep trying until I do reach a level of satisfaction. And in the meantime I will do my damnedest to always make the best of my situation.

How do you define being broke or poor in your own life? 

  • http://www.makingsenseofcents.com Michelle

    I know exactly what you mean! Yes, we can be accustomed to less, but why should I if I make more money? I could live in a less safe area and save more money, but I don’t know if I ever want to go that route in St. Louis.

    • http://budgetandthebeach.wordpress.com Budget & the Beach

      Exactly! I think it’s OK to not be OK with a salary that doesn’t make you happy or provide the life you want…within reason of course. :)

  • http://mypenniesmythoughts.blogspot.ca Janine

    I think there is a difference between being broke and not being able to live as comfortably as you would like. We all want to make more money, perception is everything. I think you’re right that everyone’s definition is different. Having worked for a decent salary these past 8-months I would say I could live a sustainable life, but nothing extravagant.

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      True. I use the term broke loosely. Creative liberties if you will. I know in my own mind when I hit my own rock bottom where I put the brakes on and really tried to change my situation.

  • http://www.thetightwadtale.com Elle P.

    What I get from the article: appreciate what you have/stop complaining about your broke ass…you have it pretty good compared to others.

    It doesn’t necessarily mean you shouldn’t strive for me, it just means you should be thankful with what you have right now. If you’re never satisfied with what you have, then you’re going to spend your whole life satisfy-less (for a lack of a better word).

    Reminds of a quote from the Dalai Lama:
    Man sacrifices his health in order to make money. Then he sacrifices money to recuperate his health.And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future;
    he lives as if he is never going to die,and then dies having never really lived.

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      I definitely got that pat of what she was saying. It’s a slippery slope between straight up complaining, and not being satisfied and that is what lights a fire under your ass. For a long time I didn’t work as hard as I could have to change my situation. Now that’s what I’m trying to do. I’m grateful for what I do have, but I’m also not going to rest on my laurels and not work my way out of my situation. At 41, I feel retirement not that far off in my life. I know to live a comfortable life at that age, I need to rectify my current income if I want that to happen.

  • http://www.thetightwadtale.com Elle P.

    strive for more***

  • http://financialconfessionsofaformerbrat.wordpress.com Financial Confessions of a Former Brat

    I agree. I’m currently making enough to pay for essentials and a little extra, but I’m not happy with that in the long run.Long term I want to buy a house, buy a car, go on the occasional trip- nothing extravagant, but I don’t want to be limited in what I can do just because I have no money!

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      I hear ya!

  • http://yalla-bye.blogspot.com/ cantaloupe

    But you wouldn’t ever say that you’re broke, would you? If a friend invited you out for a dinner, you wouldn’t respond, “I can’t, I’m broke.” Broke is a pretty bottomed out place to admit to…

    There have been months where I’ve said that though. Because I literally did not have enough money to pay for another dinner out and needed that money to buy groceries so that the food I purchased would last more than one night. That is what it means to be broke to me. When I have to turn down social outings because I cannot afford them. (Sadface.)

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      Yeah, pretty much that kind of stuff. I use the term “broke” loosely, meaning I don’t have much “free money” after my expenses are taken care of. But of course I can’t really consider myself “broke” if I am able to take care of my expenses. That’s why I think there is a lot of grey area in the definition. Perhaps I need a new word.

      • http://yalla-bye.blogspot.com/ cantaloupe

        It also depends on what you call an expense. Like Internet. It’s not really an expense for me, it’s really free money that goes towards something that I enjoy… but I count it as an expense. Because I’m not poor and I can afford to do that. I can still be broke though, even with my swanky Internet expense.

        Words are fun, haha.

  • debtandthegirl

    I read that article as well. Did you read the article about how broke is the new single? I thought it was very interesting. I def. think the author was trying to make the point that people can live with less and also to stop bitching. Someone always has it worse. I get that. I think you should always strive for more as well. I could live in a cheaper apartment and eat ramen all day but why should I compromise my health? Instead, I do other things to save money. I did like how the author brought up appreciating what you have and giving another perspective. I am frankly sick of some of the articles there that were about women whining because they felt bad about making too much money or some other crap I do not care to read about. Atleast this one was refreshing.

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      I didn’t read that one article. Interesting. I’l have to read it.

  • http://bogofdebt.wordpress.com bogofdebt

    Everyone has a different meaning of “broke” or “poor”. Just because someone defines it differently doesn’t meant that you aren’t broke. It’s kind of like how everyone has a different rock bottom. Mine might not be the same as yours but it doesn’t make it any less real to me. I did understand how the author was saying to appreciate what you have and actually liked that.

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      Yeah that’s exactly it. No two people are the same. I’m sure if a person made way more than 72k had to go to that salary, it would be difficult, but for me it felt totally good.

  • http://my-alternate-life.com Jordann @ My Alternate Life

    I think different people have different definitions of broke. I don’t think I’m broke, but I definitely am not happy with my income. I can change that though, and I plan to. The truly broke are those who don’t have enough, and don’t have a way to improve their situation.

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      I know that is one advantage…the opportunity. I have the skills and the drive to find a job where I make that…it’s just making the right connections at the right time. I won’t stop till I do.

  • http://budgetgradstudent.wordpress.com Mary

    I was thinking about this yesterday and read up on the topic. While there’s a difference being middle class and living in poverty, many sociologists think that there’s a group in between: the working class. They tend to have an income that’s adequate, but little leftover.
    I think I tend to fall in that category. My pretax income is less than $24,000 a year, and while I’m not exactly paycheck to paycheck, missing just 2 would be a disaster for me. After bills, paying down my credit card, putting a little into savings, and dealing with other expenses, most months I have a whopping $100 to spend on groceries and splurges, like getting a beer or cup of coffee. This month I had hoped to go to a girlfriend’s bachelorette, but forgot that my car was due for inspection, so I had to cancel on her in order to pay for that.
    However, most in this category have only high school educations, and more clerical or blue collar jobs. Unlike them, I have just 2 or 3 years until I have an advanced degree which will give me much more earning potential and will (hopefully) be bumped into the middle class with ease. (Aren’t you glad a nerd answered your question?)

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      No I thought it was great. Makes sense! What is frustrating is I am a college grad with YEARS of experience and it’s been tough to find a full time job. Or get enough freelance work. When I saw former pres. clinton the other day speak, I got teary-eyed because it made me think of a time when things were easier. Yes, I’ve become one of THOSE people. :)

  • http://savvyfinanciallife.wordpress.com SavvyFinancialLatina

    I also agree that people have a different definition of broke. My family is poor but I never ever heard my parents say they were broke.
    Now, my friends and I really use the term broke pretty loosely. We always talk about how we are so broke. But in reality we are not broke. We have food on our table, roof over our head, etc.
    I’m not happy with the amount of income coming into our home. I’m always thinking of ways to improve it.

  • http://therandompath.wordpress.com therandompath

    I think being “broke” means different things for people. For some, it is a true-to-life situation. For others, it just means oh I can’t buy this item. Everyone has their money troubles to deal with and may just label it differently.

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      Agreed!

  • http://twitter.com/frugalportland Frugal Portland (@frugalportland)

    I had the opposite reaction, in Denver. A stay-at-home mom talked about how her husband, if he switched firms, could make $80K to start, which she then said, “and that’s a lot!” — I thought, whoa, no way is that a lot, so that means that currently he must be bringing in $60K and he has a stay-home wife and a baby and a mortgage, and wow, I have it good b/c I’ll bring in close to $50K this year and it’s just me.

    • http://budgetandthebeach.wordpress.com/ Budget & the Beach

      Yeah 80k is pretty good for just one person…in fact more than good in most states. But factor in a wife and kid and house payment (although most house payments are cheaper than the rent on my tiny one bedroom apt in LA), and that’s not that much. My heart does go out to families living below the poverty line. And what the government considers the poverty line is just ridiculous!

  • http://mydebtmarathon.com Rachel

    I have food on the table, clothes on my back, gas in my car, and a loving family. I may not make enough money, yet, but I am able to provide what we need. I’m looking forward to going on family vacations though, having a retirement, and paying off debt. In some ways I’m not broke, but then in other ways, I have a long way to go. Nice post!

  • http://www.seedebtrun.com Michelle @ See Debt Run

    It’s weird, but I don’t think I’ve ever defined what’s “poor.” I have a number in mind that would make me feel rich, but I have no idea at what point I would say “crap…we’re poor.” I know that we have debt because we lived and spent above our means, and not because we are poor. It’s still hard to admit that we just can’t afford some things, and that it’s okay. We live in this world where everyone has a smart phone, an ipad, a pair of shoes for every outfit, and a house/apartment way bigger than what we actually need to survive. It’s tough saying no to things that we just feel like everyone else has…and we feel inadequate if we go without.

  • http://www.budgetblonde.com Cat Alford @ Budget Blonde

    This is actually a really interesting post for me to read. My hubs and I are always talking about how broke we are since we have 6 figure student loans. Yet, others have pointed out how lucky we are, how we are still in the top 1% of wage earners in the world, how fortunate I am to have a job. We live a very simple life and yet it doesn’t make us feel any wealthier. I think in your situation you would definitely “feel” broke since you have cut your earnings and were used to a different life. Still, it looks as though you are headed in an awesome direction. 46k in freelance work to me sounds pretty amazing!

  • http://thesingletonfiles.wordpress.com/ Miss JJ

    I think there is a difference between being poor and feeling broke. Or there should be, if there is not already.
    There probably is an academic definition to being poor, such as a family living at poverty level, for example, or earning X amount a year in a certain location with certain COL etc.
    Feeling broke, however, may very well be relative to life choices, as you have mentioned. In which case, anyone can feel broke, whether they earn 15K a year, or 40K, or 200K.
    I also think that while anyone can feel broke, it may not necessary be morally right for everyone to do so – as in a multimillionaire with an excessive lifestyle. Or in the case of the Learnvest article, the NYC’er who makes $40K a year. It really depends on where you draw the line, and I personally draw it pretty low.

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  • http://www.nomorespending.net laura @ no more spending

    We’re totally not broke, but I do feel very behind ‘on where I should be by now’ – financially speaking. That’s why I keep such a tight grip on our finances because I don’t want to be broke in my retirement…which seems to be fast approaching.

  • http://www.canadianbudgetbinder.com Canadianbudgetbinder

    I also think being broke means different things to different people. We are like you where we may have enough to pay our mortgage off and we have investments but after that we have to start over as we are broke. We just have to accept it and move on… and with that comes the budget! Cheers Mr.CBB

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  • http://www.balancingmoneyandlife.com Kris @ BalancingMoneyandLife

    You can be broke and not poor. I’ve been broke before – lots. Am I where I want to be right now? Well, mostly, so I’m not complaining. But I definitely understand not being happy with how you’re doing and wanting more! And I don’t consider wanting more to be a bad thing.

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