We adhere to strict standards of editorial integrity to help you make decisions with confidence. Some or all links contained within this article are paid links.
It’s natural to be curious about how well off — or not — our friends, neighbors and peers are. And for better or worse, social media makes it easy to satisfy this curiosity. You may be inclined to assume that the folks you interact with on a regular basis are doing quite well financially. However, social posts focus on the positive, which can make it appear as though they have more money than they actually do.
With this in mind, here are a few signs that may indicate the people you know are actually broke — or that you’re headed down a similar path.
Don’t miss
- I’m 49 years old and have nothing saved for retirement — what should I do? Don’t panic. Here are 5 of the easiest ways you can catch up (and fast)
- Gain potential quarterly income through this $1B private real estate fund — even if you’re not a millionaire. Here’s how to get started with as little as $10
- Car insurance premiums could spike 8% by the end of 2025 — thanks to tariffs on car imports and auto parts from Canada and Mexico. But here’s how 2 minutes can save you hundreds of dollars right now
1. They don’t have an actual financial plan
When you head out on a road trip without directions, you risk getting lost along the way. Similarly, if you go through life without a financial plan, you risk winding up broke — or if not broke, at the very least, shy of your financial goals.
A 2024 Northwestern Mutual survey found that 55% of Americans don’t have a broad financial plan that allows them to balance their near-term and long-term goals. If that’s the case for you, it’s a good idea to talk to a financial advisor and get on a better path.
Finding a financial advisor that suits your specific needs and goals is simple with Vanguard.
Vanguard’s hybrid advisory system combines advice from professional advisors with automated portfolio management to make sure your investments are working to achieve your financial goals.
With a minimum portfolio size of $50,000, this service is best for clients who already have a nest egg built and would like to try to grow their wealth with a variety of different investments. All you have to do is set up a consultation with a Vanguard advisor, and they will help you set a tailored plan and stick to it.
2. They spend a lot on brand names
It’s okay to splurge on a quality item from time to time, especially if it’s something that helps you earn money, like a laptop you use for your job. But if you feel compelled to only buy brand names — and the fanciest ones at that — you’re more likely to end up in a bad place financially.
This may be why total U.S. household debt has jumped by $93 billion to reach $18.04 trillion, according to the Federal Reserve.
If you want to avoid becoming broke, don’t buy things — whether it’s a car, a house, or clothing — with the goal of showing off. Instead, buy things with the goal of addressing your needs as economically as possible.
When you do spend, you can also be smarter with your money by automatically investing your spare change with Acorns.
The app rounds up each of your everyday purchases to the nearest dollar and invests the difference in a diversified portfolio. This means that every transaction — from your morning coffee to grocery shopping — contributes to building your retirement nest egg.
For example, when you spend $3.60 on coffee, Acorns will automatically invest the 40-cent difference. Plus, with an Acorns Silver plan, you get access to Acorns Later, a retirement investment account with a 1% IRA match on new contributions. With Acorns Gold, you get a 3% IRA match on new contributions and the ability to customize your portfolio by selecting your own stocks.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
3. They confuse income with wealth
One mistake people make all the time is figuring that because they earn a lot, they can afford to spend a lot. In reality, if you don’t keep any of your income, you’re going to end up broke.
A 2024 PYMNTS survey found that 48% of people earning more than $100,000 a year live paycheck to paycheck with no money in savings to fall back on. And the same holds true for 36% of people earning more than $200,000 a year.
Another big mistake most Americans make is leaving their money in low-interest savings accounts. More than 82% of the population is missing out on high-yield savings accounts, which offer returns up to 10 times higher than traditional banks, according to CNBC.
A healthy savings account balance gives you the funds to handle unexpected expenses and save for retirement, all without going into debt. If you’re looking for the best bank for your savings, compare and select from the Moneywise list of the Best High-Yield Savings Accounts of 2025.
4. They lack financial discipline
People who are secretly broke tend to give in to impulse purchases rather than planning and budgeting. Worse yet, they tend to use credit cards to fund impulse purchases, driving themselves even deeper into debt.
While occasional impulse buys may not break the bank, making a habit of them can seriously harm your finances. Instead, focus on budgeting and being intentional with your spending.
Budgeting can be challenging, especially when trying to track multiple accounts, shopping and daily expenses simultaneously. However, Monarch Money’s expense tracking system can simplify the process.
The platform seamlessly connects all your accounts in one place, giving you a clear view of where you’re overspending. Whether you’re looking to save, invest, or simply control your expenses, Monarch Money offers the tools to help you succeed. Plus, for a limited time, you can get 50% off your first year with the code NEWYEAR2025.
5. They keep chasing get-rich-quick schemes
There are certain tried and true methods of growing wealth over time. These include buying a home and seeing its value increase, investing in stocks and holding them for decades, and putting money into bonds for slower but stable returns.
Chasing get-rich-quick schemes, on the other hand, is a good way to end up with less money rather than more.
Even short-term stock investments can be risky, as it often takes time for stocks to increase in value. So, instead of trying to make a quick buck, focus on ways to grow your net worth slowly but consistently, such as taking advantage of compound interest.
With Wealthfront’s automated investing platform, the power of compound interest works for you. Their sophisticated "set it and forget it" approach means your money is professionally managed and automatically rebalanced, allowing your wealth to grow steadily over time.
Start investing for the long term with globally diversified portfolios or go for a higher yield than a traditional savings account with an automated bond portfolio.
Open your account today and receive a $50 bonus to jumpstart your investment journey. Whether you’re saving for retirement, a home, or building generational wealth, Wealthfront’s low-cost, automated investment strategy can help you achieve your financial goals.
What to read next
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
- Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
- Trump warns his tariffs will spark a ‘disturbance’ in America — use this 1 dead-simple move to help shockproof your retirement plans ASAP
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Related Posts
