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Do you ever find yourself struggling to make ends meet, even though you have a steady income? Do you feel like you’re living paycheck to paycheck and can’t seem to get ahead financially? If so, you’re not alone. So many of us have some bad money habits that are keeping us broke, and we don’t even realize it.
1. Treating money conversations as a taboo topic
If you are not talking about money, you are not learning about money and you are not surrounding yourself with people who are having healthy money conversations. If this is the case, you may never get the exposure required to grow in matters of personal finance.
You need to know how other people are making money, how they are saving their money, how they are investing, and what they are doing to change their money history or their past bad experiences with money.
Money is not any different. It should not be a taboo conversation. You need to have money conversations with your family, friends, and partners. Just ensure that you’re having money conversations when it matters and with the people that matter.
This is really really going to revolutionize your experience in personal finance.
2. Spending without planning.
If you are unintentional with your spending and you just go as the wind takes you, you’ll most likely be broke often.
You need to start thinking actively about planning and setting goals every beginning of the month or whenever your salary comes in.
The three most important questions to ask yourself are:
- How much money did I make?
- What would I want this money to do for me this month?
- How can I hold myself accountable that I stick to this thing that I said I want my money to do for me?
Try have a money date with yourself every end month to answer these questions and it will bring a level of intentionality and it shows that you respect your money.
Whether you earn 50k or 500k being intentional with what you’re doing shows a level of respect for your money.
If you struggle with impulse buying or you’ve always spent money without thinking through it, you can start by setting aside time every month for that money date with yourself so that you can intentionally plan how you’ll spend your money that month.
The main problem here is not spending the problem is unintentional spending.
3. Having a victim mentality
This happens to be an ‘I cannot do anything about it’ mindset which is a bad habit that is not sustainable if you want to live abundantly financially.
Always take a leadership role in your personal finances. Appoint yourself as the Chief Financial Officer (CFO) of your life. Start understanding that you are in charge of your life and actually start looking at what you can control or change.
But you can control your money, your habits, and how much you earn.
Instead of saying you don’t earn enough (victim mindset), you can change this mindset to, ‘I don’t earn enough but this year, I can and I will find one additional source of income.’ Whether this is a side hustle, starting a business, consulting or something you do on the weekends that gives you some additional money. This is how you take a leadership role in your life.
You can’t live life as if things just happen to you.
Even with the many things that you cannot control in life, you can control your spending. You can learn to say no to immediate gratification. You can choose to invest instead of spending. All these are choices that are within your reach.
4. Procrastination and avoidance
How many times last year did you say this phrase? ‘I will start again next month.’
This happens a lot. You might have set a goal this month to budget but along the way, things went haywire at some point in the month. What most people will do is give up and decide to try again next month.
That is avoidance. You’re avoiding having to deal with the failure. Having to deal with the fact that you set a budget, you weren’t able to stick with it and now you’re procrastinating sorting that problem that has just come up.
Procrastination and avoidance are habits you do not want to have when it comes to building wealth and not being broke all the time.
So what can you do?
Let’s assume you had 200K you did your budget, it’s now the 15th and things are really not working out the way you thought and now you only have 30K
Instead of saying you’ll start again next month, I’d advise you to do a mini-budget for the remaining 30K
What you’re trying to do here is to learn to take accountability when things go wrong. Even the whole process of now having to deal with budgeting for the 30K does something to you mentally. You’re now becoming more intentional and taking responsibility for your finances
If something has gone wrong, sort it out as soon as possible. Don’t procrastinate and say you’ll deal with it next month. That’s exactly how some people never ever stick to their budgets or even achieve any one of their financial goals. Just because they keep procrastinating and avoiding the problem that is
5. Not knowing where your money goes.
Tracking your expenses and knowing exactly where your money is going is absolutely necessary. I’ve had some people tell me that tracking every single coin is quite obsessive but it is not.
You cannot solve a problem if you don’t know where exactly the problem is.
Quick question, do you know how much you spent on food last month? These are details that you should know.
For instance, by tracking your finances, you could find that you spent 50K on entertainment last month. If you’re trying to fix your budget in the coming month, you can consciously slash this amount to say 20K as you try to recover from tough economic times or if you’ve just had a decrease in your income. You know what you can cut from your spending or what you can reduce.
When you have absolutely no idea where your money goes even if you wanted to sort out some issues you do not even know what the problem is.
6. Not paying yourself first.
This means putting money in your savings or investments first when the paycheck comes in.
7. Living above your means.
Another habit that could be keeping you broke is living above your means and spending on things that you cannot afford.
8. Get-rich-quick scheme that comes up.
Successful investing and wealth building takes time, patience and consistency. Wealth is not built overnight.
Not every investment option in the market is good for you. So don’t just jump into every new thing that comes up. Have a plan and stick to it in the long ter
The really wealthy people we know today found one, two or three things that worked for them and stuck with those things for the long term.
9. Having a consumer mentality.
Having a consumer mentality means you’re only buying the big brands, just because.
If you have a consumer mentality, you will always be buying material stuff and liabilities as opposed to assets.
You will always be trying to keep up with the Joneses and keep trying to show people that you’re still doing well.
Remember, the goal is to actually be wealthy not to just look wealthy.
10. Complaining all the time & doing nothing about it.
The last habit that could be keeping you broke is complaining about everything. About your money situation, about the economy, how budgeting doesn’t work for you, how investing is just not doing it for you and not doing anything about it.
If you’re complaining and you’re not doing anything about it you will still remain broke.
In case budgeting did not work for you last year stop complaining about it and figure out a way that budgeting can work for you this year.
If you were not able to consistently save and invest last month, instead of complaining about it, find out how you can learn to save and invest this year.
If you don’t make enough money start figuring out and innovating new ways of making extra money.
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