The Carr Report: 10 types of broke—and how to break free from every one of them

Upset pregnant woman and her husband planning family budget, using calculator and laptop, lack of money. (Getty Images)

We’ve all heard the phrase: “You think making money is hard? Try being broke.” But here’s the truth—there’s more than one way to be broke. Some people are broke because they overspend. Others because they’re underpaid. And then there are those who look rich, live poor, and can’t figure out where all their money went.

Being broke isn’t always about not having money. Sometimes it’s about how you think, how you manage, or how you move with the money you do have. In my years of coaching, I’ve seen broke come in many forms—and every type has a cure.

Here are 10 kinds of broke that keep people stuck, and how to break free from each one.

1. Overspending Broke—The Lifestyle Trap

This is the most common kind of broke. You make good money but spend like it’s unlimited. You buy what you want when you want—because, after all, “you work hard.”

But here’s the problem: You’re financing a lifestyle, not building a legacy. Your bank account never grows because your spending grows lockstep with your income.

Fix it:

Track every dollar for 30 days. Identify your leaks. Create a spending plan that includes saving and investing before spending. Live below your means now so you can live beyond your limits later.

2. Under-earning Broke—The Paycheck Problem

This broke isn’t about wasteful spending. It’s about not earning enough to meet basic needs. You’re working hard, but the paycheck doesn’t match the effort. You’re juggling bills, scraping by, and trying to survive on wages that don’t stretch far enough.

Fix it:

You can’t budget your way out of under-earning forever. Upgrade your skills. Get certified in a high-demand field. Pursue a side income. Network strategically. If your job doesn’t pay what you’re worth, find one that will.

3. Mindset Broke—The Belief Barrier

Some people stay broke because they’ve accepted struggle as normal. They grew up hearing “the little man can’t get ahead.”  That kind of thinking becomes a financial ceiling.

Fix it:

Reprogram your mindset. Replace scarcity thinking with abundance thinking. Learn about money, wealth, and opportunity. Surround yourself with financially disciplined people. You can’t build wealth with a broke mindset.

4. Situational Broke—The “Life Happens” Broke

Sometimes you’re not broke because of bad habits—you’re broke because life blindsided you. A job loss, a divorce, a medical bill, or an unexpected emergency can knock you flat.

Fix it:

Focus on survival first—food, housing, transportation, and utilities. Then build an emergency fund, even if it’s just $25 per paycheck. Protect yourself from future crises with insurance and savings. You can’t always avoid trouble, but you can prepare for it.

5. Temporary Broke—The Investment Season

Sometimes being broke is strategic. You might be going back to school, paying for your child’s education, starting a business, or investing heavily in your future. You’re not irresponsible—you’re reinvesting your resources for a bigger payoff later.

Fix it:

Plan your transition. Budget lean but intentional. Don’t stay broke longer than necessary—set clear timelines and financial checkpoints. Remind yourself that this is a season of sacrifice that leads to a harvest.

6. Fake Rich Broke—The Image Illusion

This one is everywhere. You look like money—designer shoes, new car, flashy vacations—but behind closed doors, you’re swimming in debt. You’re faking it until you make it. However, your fake lifestyle is impeding your ability to save and invest.

Fix it:

Let go of image management. Sell what doesn’t serve your goals. Stop chasing compliments. Build your assets quietly. The goal isn’t to look rich—it’s to be rich.

7. Complacent Broke—The Comfort Zone

You’re not struggling, but you’re not growing, either. You’ve accepted “just enough” as good enough. You’re stable but stagnant—no savings, no investments, no goals beyond next month’s bills.

Fix it:

Challenge your comfort zone. Set bigger financial goals. Automate your savings. Study wealth-building strategies. Don’t confuse comfort with success—progress lives beyond your routine.

8. Silent Broke—The High-Income, Low-Net-Worth Syndrome

You’re earning solid money—maybe even six figures—but your bank account doesn’t reflect it. You have no emergency fund, no investments, and no financial margin. You’ve mastered making money, but not managing it.

Fix it:

Track your net worth quarterly. Automate your savings and investments. Live like your future depends on it—because it does. Wealth isn’t what you earn or how much you can spend, it’s what you save and invest. .

9. Emotional Broke—Spending to Feel Better

Money becomes medicine. You spend when you’re sad, lonely, angry, or stressed. The rush of the purchase feels good for a moment—until the bill comes due.

Fix it:

Heal the root, not the symptom. Learn to manage emotions without money. Journal. Exercise. Talk to someone. Replace impulse with intention. Emotional peace will bring more relief than any purchase ever could.

10. Generational Broke—The Family Cycle

This broke runs deep. You learned how to manage money by watching people who struggled with it. Maybe nobody ever taught you how to save, invest, or plan— because they didn’t know how, either.

Fix it:

You can’t fix what you don’t face. Learn what wasn’t taught. Read financial books. Take courses. Seek mentorship. Hire a money coach. Then teach your kids what you’re learning. You can be the one who ends the cycle and starts the legacy.

The Common Thread: Control

Whether you’re overspending, under-earning, or repeating family patterns, the word “broke” boils down to one thing—lack of control.

Overspending broke is losing control of where money goes.

Under-earning broke is losing control of how money comes in.

Mindset broke is losing control of what you believe about money.

Regaining control starts with ownership. You can’t change what you won’t confront.

How to Break Free                                                

From Broke for Good

Face your numbers. Ignorance isn’t bliss—What you don’t know can bankrupt you. Write down your income, debts, and expenses.

Build a cushion. Aim for at least $1,000 in an emergency fund, then grow it to three to six months of expenses.

Cut financial fat. Cancel what you don’t need. Simplify bills and subscriptions.

Increase income. Learn skills that boost your value. Side hustles, certifications, or better opportunities—pursue them.

Invest automatically. Start small, stay consistent. Compound growth rewards patience.

Protect your peace. Financial stress spills into your health, relationships, and sleep. Build structure, not chaos.

Teach what you learn. Knowledge that stops with you dies with you. Pass it on.

Being broke wears many faces—overspending, under-earning, mindsets, emergencies, or emotional habits. But the cure is always the same: awareness, discipline, action, and consistency.

You can’t pray away poor money habits. You can’t wish away a low paycheck. You can’t manifest wealth while ignoring math. But you can decide—right now—that broke is not your destiny.

Start today. Spend smarter. Earn better. Think bigger. Break free from broke!

Financial freedom doesn’t happen overnight, but it does happen on purpose.

(Damon Carr, Money Coach & Tax Pro can be reached at 412-216-1013 or visit his website at www.damonmoneycoach.com)

Helping you flip your finances from stressed to blessed — one smart decision at a time.

The post The Carr Report: 10 types of broke—and how to break free from every one of them appeared first on Chicago Defender.