Being broke is nothing to be ashamed of, but it is something that needs to be carefully managed so you can come out the other side with the best possible outcome. Whether you’ve found yourself broke due to the pandemic, or have ended up in an unfortunate debt cycle due to other circumstances, what matters is that you take action to set yourself up for a better future. With that in mind, here are four things you should never do when you’re broke:

Mistake 1: Living Beyond Your Means

Yes, we know this one is easier said than done, but now is the worst time to live beyond your means. Debt can quickly become a downward spiral, so it’s important to do everything within your power to live according to your income. If you’ve already been living beyond your means for some time, your top priority should be seeking help to get out of debt. Once you’ve got a plan in place, you can start moving forward.

Mistake 2: Taking Financial Risks

When you’re down on your luck, financial risks should be as far from your to-do list as possible. That get rich quick scheme isn’t as good as it looks, we promise. Every cent you receive at the moment needs to be put towards getting you back on the right track. No matter how well presented a risk may seem, it just isn’t worth it right now.

Mistake 3: Being Complacent

Investing in the stock market or trying to get into property certainly aren’t wise choices right now, but that doesn’t mean you shouldn’t actively seek investments that can help improve your future. Instead of focusing on material investments at this point in time, invest in yourself.

Complacency will keep you exactly where you are right now, but learning a new skill could be your ticket to financial freedom. Find low-cost courses at community colleges that align with your goals for the future and enroll. It may seem counter-productive, but the more you know, the more you’re worth to a company, which means you’re equipping yourself to earn more for your time in the future.

Mistake 4: Failing To Save

It may seem nearly impossible to save right now, but that doesn’t mean you get to put it in the too-hard basket and deal with it later. In order to build a financially stable future, you need to have a solid emergency fund. This is your ultimate weapon for ensuring you never end up in financial strife again.

Standard guidelines suggest that you should have at least three to six months’ worth of living expenses put aside in an emergency fund on top of your regular savings to protect you if the proverbial you-know-what hits the fan. While this may not be immediately attainable, it’s a good idea to put aside as much as you can each pay cycle in order to create a solid foundation for your future.

Being broke isn’t great, but if you take appropriate steps, it won’t last forever. You have the ability to get through this and come out the other side bigger and better than ever. You just have to stay calm and remember to avoid the things on this list. If free or cheap financial planning services are available to you, we strongly recommend taking advantage of them. If not, there’s plenty of information on the internet that can help you. Stay positive, take it one day at a time, and you’ll be ok.