8 Money Habits That Keep You Poor

Let’s be real here – It’s hard to manage money. In fact, it’s one of the hardest (apart from managing a family) things to manage. No wonder grandpa used to say: Money takes wings. Grandpa is long gone but whatever he said about money is still true. One question that persisted in my mind was the Rich Dad Poor Dad mentality. Why rich people get richer and why the poor get poorer?

Turns out, it’s all about money management skills, and on top of everything: Habits. Habits is one secret that most successful people never mention. Yes, they’ll mention do this do that, but they will seldom mention what NOT to do! It’s because they know it’s the only secret they cannot reveal anyone. Well, thanks to social media, we know that most successful people have a strict routine (Elon Musk as exception). No matter what happens, they won’t break their habit.

And, that’s what we are going to learn today. The 8 Money Habits that keep you Poor. Pardon me if the word “Poor” seems harsh. Unfortunately, most people (not you) don’t want to leave their a*s from their bed and achieve something. You have to forcefully move them from their bed.


(1) Impulsive Spending

How many times have you fell for the so-called important product and spent money? Yeah, it’s not just you! Impulsive spending is a problem that we all struggle with. You may try to find a reason to make use of the product, but the money is gone. No matter how much of a good-buy a product is, the money you spend is gone forever.

Hence, keep a check at impulsive spending. Be aware of your expenses and do everything you can to stop this bad money habit. One efficient way to do it is to have someone who will constantly remind you to not spend too much. It’s often futile to fight your mind, because most of the time it’s your mind who wins. The situation changes when you get external instructions.

But why does the mind loses its power when you get external instructions? It’s because of our childhood conditioning. Since childhood our mind is accustomed to accepting orders rather than making one. The mind accepts this fact and grows with it. Unfortunately, this become a problem later in life. If you’re alone and have no one to remind you, then you can use a reminder app. It’ll surely help you.

(2) Bad Budgeting

Budgeting can literally make or break your bank. It’s hard to explain how important budgeting is to manage money. Budgeting is your finances’ guard dog. Just similar to a good guard dog, a good budget won’t let you spend on things you shouldn’t. You may have no MBA degree, and you don’t need an MBA degree to know how painful it is to see you finances go red at the end of every month.

Unsurprisingly, you’ll face difficulties initially when you try to budget. Trust me, you’ll automatically know where to put your money on once you keep doing it. Budgeting can teach you money management better than any MBA degree. Okay, maybe that was too much, but many people have proved that you don’t need a business degree to at least manage your household money flow. Japanese homemakers have been doing this for ages. A Japanese homemaker does budgeting and utilizes whatever her husband makes in a month.

So, if you want absolute control over your finances, starting budgeting today. Read books and watch videos on budgeting if necessary, but don’t shove this idea in the garbage can.

(3) Falling Into Debt

I would rather prefer falling into a real swamp than falling into debt. Really! Debt is the worst situation to fall into, the other worse to fall into is lo…Oh sorry, wrong place. Anyway, moving on… please try not to take a loan unless it’s absolutely necessary. I know people who took a loan even when they didn’t have to, and that was it for them. They lost all their savings while trying to come out of debt.

Honestly, loan is a necessary evil for most businesses. Most people don’t have the initial chunk of money to start a new business, so they take loan. The problem arises when their business cannot generate enough profit to repay the loan. This is even worse for people with job. People with job have a fixed income. Hence, taking a loan is risk too.

Debt is one thing that you should stay away from, no matter what. Millionaires usually have a huge loan, but they have the risk appetite and have enough income to repay all of it eventually. Loan is a boon for someone who has a good cashflow in their job or business. And, it’s the opposite for someone who don’t.

(4) Not Following Finance Trends

Keep an eye on what the worldwide financial situation is. If you see that banks are raising interest rates, that means the economy is heading for a downturn. Of course, the more you know about finance and world economy, the better you’ll do in money management, but it only boils down to one thing: Are your financial decisions based on research?

Trends only suggest you a path, it’s you who has to take the final shot. If for example you’re seeing that the stock market has given 50% return in a financial year. It’s high time to book profits. Because, history is proof that after a major bull market, the bears return with a bang. And, this is one bang you wouldn’t like to have a taste of.

Warren Buffett reads 6 newspapers everyday. Well, to be precise, he reads most of the time. Reading is one advice he gives to every aspiring entrepreneur, business person, or the friendly neighborhood dog. Todd Combs followed Buffett’s advice of intense reading, and it literally changed his life.

You’ll also find this one thing very common among wealthy and successful people. They read, read, and read. They gather knowledge like there’s no tomorrow, and that works for them. So, please do these: (1) Follow latest finance trends, (2) READ.

(5) Set Setting Aside Emergency Fund

By not setting aside an emergency fund, you’re literally axing your feet. Emergency fund is like the last warrior standing when the whole army has fallen. No King wants to use their best warriors in the very beginning, but still keep them well feed. Your emergency fund is that warrior who stands when everything has fallen.

If you’re already setting aside a portion of your monthly income in your emergency fund, Good! If not, then do it NOW. Of course, you’re confident enough to never fall into a financial crunch, but emergency is not always used during financial crisis. It can also be a health-crisis, or a friend who needs money to feed their family.

Emergency fund can also help you survive when you’ve either lost your job or lost your business. Usually. most people keep enough money to survive for 3-4 months. 3-4 months if good enough, but you can extend it to 6 months or more. It fills you with a sense of security of “whatever happens, I’ve enough money to survive for half a year or more.

I have written this before, but my own emergency fund saved me when I was facing financial crisis. I never regret the decision to put money into my emergency fund. Yeah, it’s a kid of insurance where you get all your money back when you’re in need..



(6) Falling For Get-Rich-Quick Scam

This is a sad reality. Innocent people fall for the get-rich-quick scam even when they subconsciously know that these things don’t work. Among all the financial scams out there, I suppose the Get Rich Quick scam is one of the oldest one, if not the oldest. People who aren’t wealthy are usually the ones falling for this scam more often. They try to double or quadruple their hard-earned money by “investing” in some dubious scheme and end-up losing all their savings when the legitimate “investment company” vanishes within the next day.

Please don’t fall in these types of scams. You WILL lose all your money.

Does that mean Get Rich Quick is not possible? NO! It’s possible to Get Rich Quick. The real issue is that we only see one side of the coin. While Get Rich Quick is only the half job, the other part is that It Isn’t Easy. You can get rich quick, but for that you’ll have to work ridiculously hard. Something that most of us don’t want to do.

The Get Rich Quick scam targets people who only know that Get Rich Quick part, but not the It Isn’t Easy. Surprisingly, sometimes, even billionaires fall into these scams and lose million of dollars. Mark Cuban lost money in one of his Shark Tank investment when he invested in a wrong guy.

(7) Hanging Out With Pessimistic People

Pessimistic people always find something wrong with the society. They are hell-bent on only finding the problems rather than looking for a solution. This attitude also affects their overall financial life and future decisions. You might have heard this famous quote somewhere: Thoughts are Things. It’s true! Thoughts really are things when your look at your past and see how some of your intense thoughts really have manifested in real life.

Pessimistic people are contagiously negative. They carry this negative aura that emits negativity, and in return, they attract unwanted situations in their lives. If you have someone in your friends/colleagues group who is pessimistic not just about money, but at everything, get away from them as soon as you can. It’s a harsh reality, but they will contaminate your mind to such a point that you’ll have hard time thinking positive about something.

This also largely affects your belief about money. If you stay in a company of people who are negative, and see everything as hopeless, soon, you’ll do become like them. So, before you hit that rock bottom, leave such group and engage with people who are like-minded and positive about everything, not just money.

(8) Negative Subconscious Belief

No matter what everyone says, how you end up in your life is mostly decided by your subconscious mind. Unfortunately, the problem is that most people don’t know how sensitive the subconscious mind is. Whatever your 5 senses picks up directly affects your subconscious mind. It’s the eternal recorder that never stops. Even when you sleep.

Fight your mind’s voice when it says something like: Money is bad. Because if you don’t stop your mind’s chatter, your subconscious mind will accept this as true. Your subconscious mind is astonishingly vast. It’s like an ocean that has limits not known to humans. Listen to positive affirmations about money, or script about the good things that happens with money. Affirmations and visualization is a great to create an prosperous mindset.

Years ago I watched a series about young entrepreneurs. Though I cannot recall all of them, but one guy said something that I still remember. This is the short chat between the interviewer and the young entrepreneur:

(Q.) Interviewer: What if your products don’t sell and you go bankrupt?
(A.) Young Entrepreneur: I know my products will sell.

(Q.) Interviewer: But what if it doesn’t?
(A.) Young Entrepreneur: But it will!

What the young entrepreneur showcased is a classical example of an optimistic mindset! A healthy subconscious belief about finance. He was persistent that his products will sell. And, guess what? It really did!

A pessimistic subconscious belief can do great damage to your growth. Keep an eye whenever you think negatively about money.

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