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Intro

If you ever wondered why it's hard to reach your money goals, you might be stuck in one of these 10 money habits keeping you poor. Coming in with a degree in accounting and finance, I've learned a lot of useful stuff about getting better with money and avoiding big mistakes. In this guide, I'll talk about these habits that hold back your money growth and give you simple ways to fix them.

Not Paying Yourself First

Not paying yourself first. The number one rule in handling your money is to put some aside for yourself before anything else. I've learned this concept from Reading Robert Kiyosaki's Rich Dad Poor Dad. If you skip this step, it's tough to improve your financial situation.

Usually what happens is when we get paid, we immediately use the money to cover bills, and there's not much left. Start by saving for yourself first. In a nutshell, here's how you can do it: begin with 5% of your paycheck and gradually increase it to 10%, aiming for the recommended 20%. 

The more you can save from your income, the quicker you can grow your savings and improve your financial situation.

Impulsive Buying

Impulsive buying. So picture this: you're at the mall just wandering around, and suddenly you spot something you didn't know you wanted, but now you really, really want it. It's like falling for a cool new thing, and that feeling is awesome. I get it.

But here's the thing: we need to be real with ourselves. That happiness from buying something, it doesn't last. We've all said, "I deserve this," to justify a spontaneous purchase. No big deal. I've done it too, and I'm guilty as charged. But if this happens a lot, especially if it puts you in debt, it's time to pause and think things over.

Saying Yes When People Ask for Money

Saying yes when people ask for money. Ever notice how it's tough to turn down a friend who asks for money, even when you're struggling financially? We often feel obligated to help, even if it's a small amount, even if we know we might not get our money back. 

What's even harder is that the people who borrow from us might not fully understand the sacrifices we make to lend them money. Maybe we had to skip a meal or give up on a family trip to help them out. It's important to recognize the real cost when lending money that we can't really afford and learn to say no. 

The more we say no, the easier it gets, and the fewer people come asking for money. But I agree that sometimes we really can't ignore not turning down someone who really needs money for emergency purposes.

Hating on Money

Hating on money. We're in a time where it's trendy to criticize money and shame the wealthy. Hating on money is popular, and it's become a sort of competition. But let's be clear: it's not about doing what's right, it's more about trying to look good on social media.

The thing is this: social reputation doesn't pay your bills or give you the freedom you want. Money is important; it makes the world go round. Without it, you'd be constantly worried about survival like a chimpanzee stuck in survival mode. 

Don't fall into the Trap of hating on money. Instead, appreciate it, value what it lets you buy, and the freedom it brings. Money matters, and it's okay to acknowledge.

Being Okay with Bad Debt

Being okay with bad debt. The usual way of life in America involves living with a lot of debt. It's no surprise that many of us are quite comfortable with carrying so much debt. The issue with this is that the debt keeps piling up over our lifetime, eventually, we reach retirement burdened with car loans, student loans, personal loans, and credit card debt.

To break this bad money habit, commit to paying off your debt. Now take some time today to create a plan for tackling your debt. 

Avoid getting a new car loan or taking on more debt until you have it under control, and don't buy things you can't afford. Prioritize paying off your debt, and your future self will be grateful for it. Nothing boosts your cash flow more than getting rid of debt.

Keeping Up with the Joneses

Keeping up with the Joneses. We've all been there: friends or family with expensive tastes and the constant temptation to keep up with them. Maybe you envy influencers flaunting lavish lifestyles on social media. But this bad money habit hinders you from having more money after paying bills and saving.

It's the reason you might be in debt, and it can keep you poor if you're not careful. If your friends or family always want pricey dinners or trips you can't afford, it's time for a chat. Share your financial goals to save and invest; they should understand. Politely decline certain invitations or suggest more budget-friendly activities. 

If they don't respect your choices, consider finding new friends. And remember, appearances can be deceiving. What you see on social media might not reflect reality. Someone showcasing a luxurious vacation might have put it all on a credit card they can't immediately pay off.

Not Having a Safety Net

Not having a safety net. The key difference between those who struggle financially and self-made millionaires is the latter's habit of saving consistently. The earlier you start saving, the more wealth you can accumulate, whether it's for a rainy day, retirement, investment, or a big purchase.

The savings journey should begin today. After setting a budget and keeping track of your monthly expenses, it's time to regularly put money aside for an emergency fund. Saving 3 to 6 months' worth of expenses to have a safety net for unexpected bills.

Not Investing

Saving money is a good start, but if you don't invest it, you're missing the chance of growing it. Lots of self-made millionaires didn't start with tons of money; they began by saving, even when they didn't have much. 

What made them different was not just saving but also putting their money into investments like stocks or property. As time went on, the mix of saving and investing helped their money grow a lot, turning them into millionaires. 

They made themselves. So if you really want your money to grow and become wealthy, you have to try investing too. Investing in stocks, properties, government bonds, and the like can make your money grow more and keep you financially secure for the future.

Paying Too Much in Tax

Failing to plan for taxes often leads to higher tax bills. But you can change that by making a plan to pay less in taxes. Being smart about it means knowing some tricks, like if you put extra money into your retirement fund, you won't have to pay as much tax.

And if you can, having an HSA account can also help lower your tax bill. Investing in a Roth IRA is another cool trick because you don't have to give away any money you make to taxes. Talking to a tax expert is a good idea too, so they can help you find more ways to pay less tax. 

So start doing something now to understand and make the most of your tax situation. It's like keeping more money in your pocket.

Relying on a Single Income Source

Imagine if you only had one way to make money, like a job. That's like having all your eggs in one basket, which is not good as most finance experts agree.

If something happens to that job, you might have no money, and when push comes to shove, you might need to borrow just to get by. But some people have more than one way to make money, like doing a side job. 

This way, if their main job stops, they still have some money coming in. And guess what? Having more than one way to make money aside from their main job lets them save more or pay off their home loan faster. It's like having a safety net for when things don't go as planned. So having different ways to make money is a good idea to be ready for anything.

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Intro

If you're wondering why a lot of people are broke, you're at the right place. I used to be like that, so I know what makes it happen even better. I fixed my money problems by doing the total opposite, and you can do it too.

In this post, I'll share the most common reasons why most people are broke, and if you don't want to be like most people, all you need to do is not make these money mistakes.

They haven't set clear money goals.

Money goals are the foundation of every step you take with your money. In simple terms, when you create money goals, you're planning your future money moves. They provide you with a financial roadmap and a sense of purpose.

Plus, without them, there's no way to keep your money habits in check. For instance, if you choose to save ten thousand dollars this year, every time you think about spending money, you should ask yourself: will this help me save ten thousand dollars or make it harder? Honestly, just asking yourself that simple question can mean the difference between buying stuff on a whim and spending wisely.

In fact, asking yourself questions like this could be what separates being poor from being rich.

They don’t set a budget.

A key reason why many people are broke is because they don't follow a budget. In fact, a recent study by the U.S. Bank revealed that just 41 percent of Americans actually use a budget.

And if you don't have a budget, how can you tell when your spending is going off the rails? Making a budget lets you plan, keep track of, and examine your spending habits. It's like a well-marked road leading to your money goals.

Not Keeping an Eye on Their Spending

One reason people are broke is because they don't keep an eye on what they spend. But that's like missing the whole point of having a budget. If you're not watching what you spend, it's easy for money to just disappear.

Then, before you know it, you're broke, and you don't even know how it happened. I like to compare watching your spending to looking after a child. Little kids can easily wander off, so what do you do as a parent? You keep an eye on them. The same thing applies to your money.

If you're not careful with your spending habits, money can just vanish, whether it's at the supermarket, shop, or eatery. You need to watch your spending. If not, you might end up wondering where all your money went.

They use too many ways to pay.

Adding complexity to your money matters just makes handling your finances tougher. Let me paint a picture for you. Imagine a world without credit cards or borrowing money. Everyone would need to pay cash for anything they wanted to buy.

Imagine how straightforward that would be when dealing with money. The more loans and credit cards you bring into your financial life, the more tangled things get. Before you know it, you're using money from six different credit cards with different amounts owing.

Then, to pay all those debts, you have to sign into separate accounts since each account has different interest rates and records transactions at different times. It's super hard to know how much money you actually have and how much you owe.

This is a really messy way to handle your finances, and it often results in bad spending habits and money mistakes. On the other hand, if you just use a debit card to buy stuff, you can sign into one account and know exactly how much money you have.

This makes keeping an eye on your spending a lot easier, and budgeting becomes a lot more enjoyable.

They have credit card debt.

It's no secret that having credit card debt is a bad thing. Not only does it make your spending habits more complicated, like I mentioned before, but it also hits you with sky-high interest rates.

Actually, these interest rates are so steep that, unless you're really committed to paying them off, you could be stuck in credit card debt forever. Credit card debt is a big roadblock to being good with money, and it's one of the main reasons why lots of people are broke.

They take out loans to buy things that lose value.

Besides credit card debt, a lot of people are broke because they take out loans to buy big-ticket items they can't really afford. Also, most of these loans are used to buy things that lose value over time, like cars, RVs, boats, and just about anything else with an engine.

I may not be a money expert, but I think the secret to getting rich is to do things that make your money grow, not pay extra for something that's losing its value.

They make money choices based on monthly payments.

One of the biggest money mistakes you can make is deciding if you can afford something based on what the monthly payment will be. For example, if you want to buy a new car, you might think I can handle the monthly payment so I can afford it, but a smarter way to think would be that I can't afford this car because I can't pay for it all at once.

If you make your buying decisions based on the cost of the monthly payments, whether or not there's interest, it's easy to end up broke. Why? Because sooner or later you'll use up all your income on monthly payments, and the worst part is you'll be stuck with those payments for months or even years.

Making purchases based on cash flow and monthly payments is like slowly locking yourself in financial jail.

Living Beyond Their Means

Another straightforward reason why people end up broke is simply due to the numbers. They're spending more than what they're bringing in. They could end up in this situation for many reasons: maybe they're overspending to keep up with their friends or buying stuff they don't really need, or perhaps they're making impulsive purchases instead of planning and saving in advance.

So what's the solution? Get a clear understanding of your monthly cash flow. The money that's coming in and going out after taxes determines how much you're actually taking home from each paycheck. Review your expenses and identify areas where you can reduce spending if you're going overboard.

They don’t plan for unexpected costs.

A 2018 study from the Federal Reserve Board found that almost one-third of U.S. households would have to sell something or borrow money to handle a $400 surprise expense. Now I don't know about you, but that seems like a big issue, especially because, uh, 400 unexpected costs isn't something I'd call rare.

Actually, I'd say that's a pretty small unexpected cost. Just one visit to the emergency room will show you what I mean. If you don't plan for unexpected money problems, you're setting yourself up for a financial mess, and while health emergencies are common, they're not the only thing to worry about.

What if your car stops working? What if you lose your job? The worst part is that the less prepared you are, the more problems you'll face. Don't believe me, okay? Think about this situation. Let's say there are two people. The first

They don’t regularly invest.

It's crucial for you to know that just saving money won't make you rich. To build wealth, you need to make your money work for you, which means investing regularly over a long period of time. In fact, do you know what separates people without money from those with wealth? People without money pay interest, while wealthy people earn interest. 

So basically, if you don't want to be broke, you need to do two things. Avoid debt and invest; that way, you won't be the one paying interest but the one earning it.

They spend money before saving it.

Another reason why most people are broke is because they spend before they save. The usual pattern is that people take their income, subtract their monthly expenses, and then use whatever is left to save and give. 

The issue here is that this approach puts spending before saving, which often leads to a pretty weak savings account and slow progress towards financial goals.

So if you want to budget the right way and avoid the common pitfalls of people who are broke, flip this money process around. Instead of making spending a priority, make giving and saving the first things you do with your money.

They’re consumed by fear.

Fear of failure traps many individuals in unfavorable financial situations. Those who don't want to make errors or lose money are fearful of the effort, sacrifice, and commitment required. They believe that learning to manage money effectively is too demanding and time-consuming. 

If fear is holding them back, they need to understand that success cannot be achieved without taking risks. Achieving this requires taking gradual steps.

Assessing their current financial status and creating a budget and long-term plan are the initial steps. Remember, failure is not the end of the world; they shouldn't let it prevent them from moving forward.

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Intro

• Are you looking for ways to save money and live a more frugal lifestyle?

If so, you've come to the right place. Today we're going to share some frugal living tips for beginners.

So whether you're looking to save money on groceries or reduce your monthly expenses, keep watching till the end of the video for some great tips.

11. If possible, eliminate monthly subscriptions

You might not realize it, but you probably have a lot of monthly subscriptions, from your gym membership to your Netflix account. Those 10 to 20-dollar monthly expenses really add up.

If you're serious about saving money, take a close look at your monthly budget and see where you can cut back. There's no shame in canceling a few subscriptions here and there. Your wallet will thank you in the long run.

Consider how often you use each service and if it duplicates another. Rather than paying for several streaming services, news sites, or beauty subscription boxes, pick the one you use most and cancel the rest.

10. Auto Invest

Even if it's a small amount, one of the best things you can do for your future is to start investing early. And you don't need a lot of money to get started. In fact, you can begin auto-investing with very small amounts of money.

There are plenty of investment platforms that allow you to start with as little as five dollars. And once you get into the habit of investing, you can gradually increase your investment amounts.

Investing is one of the smartest things you can do for your future. It allows you to grow your money while taking less risk than gambling or stock market speculation.

9. Shop for new insurance

Another way to save money is to check for better insurance rates. People may save hundreds or even thousands of dollars by comparing coverage options.

Rates may vary by state, and they can also change based on such things as your age or marital status. If you want to switch insurance providers, you should shop around for the best rates on the market before making any commitments.

It's important to know that rates might differ from one year to the next due to changes in legislation or economic conditions.

8. Buy used items

You can find high-quality goods, whether it's a designer bag or a fancy car, at a reduced price by buying second-hand items.

If you're looking to purchase a car, keep in mind that new cars depreciate rapidly in the first year, so there are savings available if you're prepared to buy something previously owned.

Consider looking for certified pre-owned vehicles or hiring an independent mechanic to analyze them before buying to ensure you get the best deal on a used automobile.

Pawn shops and Facebook sales groups are excellent sources for barely-used brand-name goods, jewelry, and furnishings.

However, if you're purchasing a product from a private seller, be wary of replica products and do the transaction in a public place.

7. Choose renting over owning

Owning a home or car comes with plenty of responsibility and monthly costs. If you're not ready for that level of commitment, consider renting instead.

Renting an apartment is often cheaper than owning a home or condo, especially when you factor in the cost of repairs, maintenance, and property taxes.

And if you're only in town for a few years, it doesn't make sense to invest in a property you'll eventually have to sell at a loss. The same goes for cars.

Leasing a vehicle may be cheaper than owning one outright, especially if you don't have the money for a down payment. Plus, you won't have to worry about expensive repairs or maintenance costs down the road.

6. Purchase at the Right Time

One of the easiest ways to save money on big-ticket items is to time your purchase correctly.

For example, if you're in the market for a new computer, wait until the new models come out and the old ones are discounted.

If you can't wait, look for seasonal sales events like Black Friday or Boxing Day.

You can also buy appliances, furniture, and other household items after the holidays when retailers are looking to clear inventory.

5. Watch for Deals on Travel

Another way to save money when traveling is to book your trip at the right time.

Flights and hotels tend to be more expensive during peak season, so try booking a few months in advance or waiting until the last minute to score some great deals.

You can also take advantage of rewards programs offered by airlines, hotels, and credit card companies.

If you're a frequent traveler, those points can add up quickly and be redeemed for free or discounted travel.

4. Buy high-quality products

One way to save money in the long run is to purchase high-quality products. Although they may cost more initially, they often last longer and need fewer repairs.

Think about appliances, cars, furniture, and other items you use every day. It's worth spending a little more upfront to get something that will last instead of having to replace it every few years.

When you do have to replace an item, try selling the old one online or at a garage sale to get some of your money back.

3. Exchange items with friends and family

• Do you have a closet full of clothes you never wear?
• What about the kitchen gadget you never use?

Instead of letting unused items take up space in your home, see if someone you know might want them instead.

You can do the same with books, movies, and furniture. You can also host a swap party with friends or family members.

Everyone brings items they no longer want and goes home with something new. It's a great way to save money and declutter your home at the same time.

2. Take advantage of cheap activities

It's not necessary to spend a lot of money to have fun with Instagrammable moments.

Going for a picnic in the park with your spouse is just as pleasurable as purchasing an expensive lunch or dinner at a restaurant.

Planning ahead can also help you save on recreational activities. For example, many museums offer free admission days or hours.

Taking advantage of these opportunities can be a great way to enjoy some culture without spending a lot of money. The same goes for attractions like zoos and amusement parks.

Many of these places offer discounted tickets if you purchase them online in advance. And if you belong to a club or have an AAA membership, you may be able to get even deeper discounts.

Whatever your interests are, there are probably ways to enjoy them without breaking the bank. Get creative and see how much fun you can have without spending a lot of money.

1. Stop your bad spending habits

The first step to living a more frugal lifestyle is to stop your bad spending habits.

We have a video on the 10 bad spending habits you need to stop right now, which you can check out right here. If you want to save money, you need to be aware of your spending patterns.

• Do you tend to spend too much when you go out with friends?
• Do you have a shopping problem?

Whatever the case may be, it's important to catch yourself and correct your behavior. If you have bad vices such as smoking or excessive alcohol consumption, stop them right now.

Cutting back on smoking, limiting your drinking, and restricting your junk food habits are all good methods to save money.

Cigarettes, alcohol, and high-end coffees add up quickly in terms of both money and health. Cut back on or eliminate these harmful habits while still maintaining a healthy lifestyle, month by month.

Once you're aware of your bad spending habits, it will be easier to change them. And trust us, changing your spending habits is essential if you want to save money.

These frugal living tips will help you get started on your journey to saving money.

Or you can check out this video to learn some little ways you can start living a frugal lifestyle right now. You can also check out our playlist for more frugal living tips.

And lastly, don't forget to subscribe to our channel for more content like this.