10 Money Habits That Are Keeping Your Poor | How To Be Good With Your Money

The truth is that everyone has a
potential to become rich however certain people have habits that are crippling
their ability to build wealth luckily if you can identify and correct these bad
habits then you can change your ways and build true wealth
therefore in this video I’ll share with you ten money habits that are keeping
you poor and if you’re new to the channel then hit the subscribe button
below for more life changing content habit number one impulse buying those
who are constantly in financial distress are often the type to snatch up
something whether it’s on sale or not even if the purchase wasn’t exactly
planned in fact impulse buying can lead to a series of different issues first
many people will justify these unplanned purchases by saying that they earn this
new gadget or that the item is not a want but a need second the spur of the
moment purchases when put on a credit card may lead to the person paying for
the item without actually having the funds to cover the cost finally these
random purchases make it much more challenging to adhere to your spending
budget to compound these issues a lot of people once realizing that their budget
is blown well continue spending knowing that they failed in sticking to their
budget now don’t get me wrong an impulse purchase from time to time will not
derail your chance of ever becoming wealthy but as you can see issues begin
to compound when you spend outside your financial plan as a best practice
everyday say the following affirmation to yourself I only buy what I need
before you know it you’ll be a much more cautious vendor and this restraint for
making impulse purchases will have your bank balance growing in no time habit
number two using credit cards for the points not all row or credit cards are
evil in fact when used responsibly some definitely have their place in your
wallet however there’s a reason credit card companies offer those rewards and
it’s definitely not out of the goodness of their hearts
rewards encourage you to spend more plain and simple a 2010 study presented
at a meeting for the American Economic Association found that simply using
awards or point based credit card with a 1% return annually actually increased
monthly spending by 68 dollars an overall credit card debt by 115 dollars
per month suddenly that pursuit of points doesn’t
seem so savvy well you might score a little cash back
on that purchase many cards impose heavy restrictions from no annual cops to
higher cashback rates only for limited purchases such as gas and groceries you
might not be getting back as much as you think going deeper into debt in pursuit
of this almighty credit card point is simply not worth it
bobbin number three keeping up with the Joneses real estate agents often say
it’s better to be the worst house on the best Street then the best house on the
worst street however when your neighbors seem to have it all the drive to be the
best house on the best Street can overshadow your spending savvy
competition is a psychological trigger that can cause spending and keeping up
with the Joneses or competing against family members neighbors or friends can
lead you to overspend while some people simply don’t care about measuring up to
others it can be a real challenge for certain families when friend purchases a
new vehicle or home takes a pricey vacation or even wears expensive jewelry
it can trigger competitive behavior that leads to poor spending decisions it’s
important to remember that success is hard to measure from the outside when
you see a neighbor pull up in a shiny new car remind yourself of your
priorities and goals no one can see your retirement account balance but you know
that you’re working to secure a comfortable future by contributing to it
instead of that new watch cabin number 4 relying on retail therapy
well some people exercise or listen to music to reduce stress others fun
therapy and spending shopping can actually release endorphins in the brain
similar to other activities such as exercise sex and even eating chocolate
unfortunately like those three things spending money in order to feel good can
actually become addictive shopping to boost your mood creates a link between
happiness and buying material goods and it’s a link that can be seriously hard
to break so how pervasive is this issue a 2016 study conducted by Ebates the
pioneer and leader in online cashback shopping from the 96% of adults and 95%
of teens participated in retail therapy the top items that provided therapy for
these individuals included entertainment travel and electronics needless to say
this type of spending impacts just about every
of course if you can’t get your emotional spending under control you may
need professional health shopping addiction is real and can be difficult
to break with the help of a dedicated mental health professional you can learn
your triggers and find coping mechanisms to help keep you out of debt now am I
saying that all shopping is bad of course not you just can’t do it to help
you feel better at the end of a bad day find another cost effective ways to
reduce stress and increase your happiness and you will get the same end
result without busting your budget have a number-5 expecting a miracle people
who are constantly in money troubles often believe that writing their
finances would take a money miracle however you’re never going to get out of
debt by winning the lottery landing a windfall from a wealthy relative or
having the world’s best paying jobs simply fall in your lap what makes this
way of thinking so dangerous is that it removes you from a position of control
when you’re hoping for someone else to swoop in and save you from your bad
habits you’re handing over the financial steering wheel and emotionally cutting
yourself off from your debt of course we all know that your credit debt and
lifestyle belong only to you and only you can solve the problem in fact having
a sense of control is one of the keys to financial wellness
you see there are many aspects of life that are out of your control for example
you don’t have much control over the economy or the job market because of
this it can be easy to get discouraged when things aren’t going your way to
avoid feeling defeated give yourself the opportunity to make a choice about
something you do have control over choosing to save as one small way you
can have some say in your financial life just ask Charles Duhigg author of the
power of habit in his latest book smarter faster better doing writes
motivation is triggered by making choices that demonstrate to ourselves
that we are in control the specific choice we make matters less than the
assertion of control in other words it’s not really about the five bucks you save
or the extra twenty five dollars you decide to throw out your debt is the
fact that you’re making the decision in the first place that makes this
psychological trick incredibly powerful so instead of waiting for a miracle
start opening your bills and taking the time to make a budget set up payment
agreements to stay current pay all new bills on time and remember
you’re the one who is affected when you’re facing financial challenges haben
number six succumbing to lifestyle inflation as you get older you probably
expect to achieve a better financial status than when you were a young adult
a better job arrays and even natural economic inflation can all affect your
earning power however the difference between those who succeed in growing
their wealth and those who perpetually struggle is how they manage the balance
between their income and expenses you see it’s tempting to put all these
increases in income towards a new house a vacation or simply increasing your day
to day spending but doing so could land you back at square one for example is
Bowl earn $60,000 per year and spends forty five thousand but Jeff earns a
hundred and fifty thousand and spends one hundred and seventy five thousand
who is truly in a better financial situation although Bill earns less
earnings aren’t the only factor when it comes to building wealth it’s how you
manage your money that counts unfortunately for most people lifestyle
inflation is a natural part of earning more and moving up the chain at work but
it’s only acceptable if you’re spending within your means as soon as you start
going into debt to afford a certain way of living it becomes problematic make
sure you only spend what you can afford and maintain your valuable financial
freedom hobbit number seven avoiding your debt when you have a seemingly
insurmountable amount of debt just the thought of paying it down can make you
cringe and for many of their strategy for managing this debt is by avoiding it
those attending norther debt may engage in the red flag behaviors like avoiding
phone calls from creditors and throwing OH bills before they even open them you
don’t have to like your debt but you do have to acknowledge it get in the habit
of opening your mail when you feel calm and ready the more you know about your
debt the better prepared you can be to face it once you know how much you owe
work out payment plans if you owe a lot to several different creditors pay your
utility and fix bills first and then focus on the account with these smallest
balance this can feel more achievable and paying it off can give you the
motivation you need to move on to the next biggest balance haba number eight
taking interest-free loans like credit cards that offer points and rewards
stores that offer no interest loans are simply luring in potential betters and
enticing them to spend more than they can afford the sad part
is that many people who bite on such offers won’t pay off their loans before
the interest rate period ends after which they’re often slammed with fees
and even retroactive interest from that so-called interest free period always
read the fine print and remember unless you’re certain you can pay it off before
the grace period ends interest-free loans are anything but Hobbit number
nine only paying the minimum paying the minimum every month doesn’t mean you’re
getting out of debt in fact minimum payments are often calculated to be
about four to six percent of your balance which could mean you’re not only
staying in debt but actually accruing more interest when you open your credit
card statement remember that you owe the balance not just the amount listed under
minimum payment habit number 10 relying on only one source of income for most
people having a sole source of income is a way of life and this income usually
comes in the form of a salary and fortunately jobs aren’t as secure as
people perceive them to be in fact in 2018 alone US businesses laid
off more than 21 million people meaning that if your job was the only way you
made money then all of a sudden your cash flow came to a halt when it comes
to income sources you need to think of yourself as a tree do trees grow fruit
only from one branch the simple answer is no they have different branches
producing flowers and fruits and so should you you should keep developing
and learning new ways to let your income work for you this is not only wise but a
safe way to help you sleep at night now obviously the solutions to each of
these bad habits varies from person to person someone might need to take up
exercise to replace the mood boosting properties of shopping while another
should probably cut up that cash back card to reduce temptation however as
with all bad habits the first step is recognizing that your behavior needs to
change if you find yourself chronically sabotaging your financial stability it’s
time to hit pause and take stock of yourself knowing you’re hurting your own
chances for freedom might just be the kick you need to finally get yourself
out of the red thanks for watching if you want to go from the life you have to
the life you deserve then hit the subscribe button

Zane Wilson

6 Responses

  1. That's an interesting note about using rewards for credit cards but it makes sense. We have to weigh is it really worth it to use the credit card for reward points. 🤔

  2. We believe that avoiding you debt would be the worst. Since it will quickly spiral out of control.
    Nice video, as allways 👍

  3. Really good point about managing the balance between income and expenses. I always tell people this: Someone making $50k and saving half their income is better off than someone making $100k and saving less than a quarter of their income.

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