Entrepreneur's Corner

Dear Entrepreneur, Here Are 10 Money Habits That Will Keep You Poor Forever

BY Getrude Mathayo · May 19, 2023 01:05 pm

KEY POINTS

Impulsive buying can land you in debt, leaving you with interest payments that eat away your income. Not investing in your earning power through education or skill-building can limit your income potential, causing you to fall behind as living costs rise. If these habits persist, they can create a perpetual financial struggle.

Good and bad money habits play a vital role in determining your financial future. Poor money habits can keep you broke by diminishing your wealth over time, creating a cycle of financial instability. For instance, a lack of spending discipline can lead to living paycheck to paycheck with little or no saving

Money, earning, saving, and growing is a tricky endeavor. Sadly, some habits, when left unchecked, could leave you stuck in a cycle of financial struggle

There’s no magic formula for building wealth and getting rich. It’s simple, really: Spend less than you earn, and save as much money as you possibly can.

But in a world filled with student loan debt, cost-of-living increases, growing inflation, and sudden financial emergencies, executing this straightforward plan might sound like a fairytale.

If your goal is to get rich, check out the following eight tips on how you can sidestep the obstacles and maintain your focus. They should help you understand what it takes to build wealth and find your way to financial security whether it is through investing or building your own business website.

Lack Of Spending Discipline

One of the biggest culprits that keep people broke is a lack of spending discipline. It’s like a leaky bucket you earn, but the money slips through holes of unnecessary expenses. Consider an individual who splurges on gourmet coffee every morning

There’s no harm in raising your standard of living when you can. However, if you are a person who is constantly looking for ways to spend your money, you will probably find yourself in a difficult situation soon enough

Lack Of Earning Power

Sticking to a low-paying job or not seeking opportunities to increase your income means you’re likely to stay broke. It’s a harsh truth, but money often flows towards skills and value. If you’re not improving your skills, you’re not increasing your value, and you’ll find it hard to earn more. A diligent approach to continuous learning and career growth could help escape this vicious cycle.

Lack Of Financial Literacy

Financial literacy is critical. It’s not just about earning and saving money but understanding how to make it work. A person who isn’t financially literate might save, but without investing, they lose the potential for compound growth. Start reading financial books and blogs, and consider speaking with a financial advisor. Knowledge is power, especially when it comes to money.

You’re Not Paying Yourself First

A typical money trap is paying everyone else, landlords, credit card companies, and utility providers, before paying yourself. This habit leaves little for savings or investments. The individual who follows this pattern often lives paycheck to paycheck, struggling to build wealth. Aim to save or invest a portion of your income before you pay your bills

Impulsive Buying

Impulsive buying is a fast track to an empty bank account. The thrill of a sale or the desire for instant gratification can lead to purchases you don’t need or can’t afford. If you’re buying a new pair of shoes every month, consider whether it’s necessary or a want

Selling Your Time for Money Is Your Only Income

If your only income comes from selling your time, a salaried job, or hourly work, you’re caught in a cycle that limits your earning potential. There are only 24 hours in a day, after all. Consider building passive income streams, like websites, YouTube channels, or online businesses, which could generate money while you sleep.

You think it is too early to start saving

When you are young, it is easy to get carried away by the various pleasures money can buy. People often think that right now is too early to start saving or investing. Wrong! It is never too early to save a portion of your income, no matter how low or high your income is.

Not keeping a record of your money

We all think that we know where our money comes from and where it ends up. Sadly, that’s not true for most of us. We might be aware of our major expenditures, but the small things usually eat up our finances more than the big ones.

Ignoring your debt

For a lot of people in today’s world, interest eats up a huge portion of their finances. It’s a painful fact. Still, they don’t know how to get out of this vicious cycle, leaving them with little to no savings.

Focusing on the present without caring about the future

Usually, when people find it hard to tackle a problem, they choose to ignore it. That’s a sure recipe for disaster. The same is the case with your finances. Generally, people focus on their present needs, wishfully thinking that future needs will somehow be met in some way.