To be broke may mean that you have no money, but it’s a temporary situation. You’re just one good paycheck away from financial stability.
As a rich man, you could still get broke because everything isn’t permanent for life.
In a situation that you are broke, you should never do the below things.
Take out a loan for a new car, or for any other reason: If you’re broke, you can’t afford another monthly payment and that’s exactly what you’re adding to your plate when you take out a loan.
Go on an expensive vacation: You’re broke, you can’t afford a vacation. If you have money saved up for a vacation, there’s probably something more pressing you could spend that money on—like past due bills or car repairs, for example.
Loan money to someone else, or cosign for them: Having no money for yourself means you also don’t have money for anyone else. Cosigning is included here because cosigning a loan is essentially accepting the responsibility for the monthly payment if the other signer can’t make it.1
Spend money on non-necessities: One of the hardest things to do, when you’re broke especially, is to rein in your spending and keep it only to the things you need. It’s important, however, to keep your spending to a minimum until you can afford to spend more.
Eat at restaurants: Buy groceries and prepare your meals at home. Take your lunch to work, even if it means having leftovers.
Have cable television: Many networks let you watch the shows online for free a day or two after the show airs. That’s a good way to stay up to date with your favorite shows without the extra cost.
Go clubbing with your friends: You simply can’t afford to do this if you’re broke—unless you’re not paying a cover and somehow getting free drinks. Find a less expensive form of entertainment and fun.
Pay more than the minimum on your credit cards: Normally, the advice would be to pay more than the minimum so you can pay off your card balances. However, if you’re struggling financially, you can cut back on payments, temporarily, so make the most of your money.
Move to a more expensive apartment: Keep your living expenses as low as possible. If your lease at your current residence is nearing its end, talk to your landlord about renewing it at the same rate (or a lower rate if you’ve been a good tenant.)
Ignore your bills and bank statements: Ignorance is not bliss in this case. While you have your head buried in the sand, a storm is brewing all around you and you can’t ignore it forever. Facing the reality of your situation is the only way to make the most of it and try to get out of it.