Are you struggling with money and wondering why you haven’t achieved financial security and the wealth that you so desire?
Do you feel it’s very hard to earn money, and those who are rich just got lucky, because according to you, that’s the only way one can achieve riches?
Habits are what shape our lives. If you’re finding yourself struggling with money all the time, chances are it has to do something with some of the habits that you’re doing over and over again.
It’s much easier to blame your financial situation on something or someone else. But here’s some tough love, the reason why you don’t have the money and wealth you so desire is you and your habits.
Sure, you can say something like, “Oh, I’m doing whatever I can, but my spouse, or the government, or the economy, or this, or that.”
The thing is, the sooner you accept the responsibility for your life, the faster you’ll be able to act and do something about it.
You can start pivoting and changing towards financial security, first by identifying and knocking out the bad habits that you have and then developing new good money habits.
So let’s go through the top 5 bad money habits that keep you from moving towards wealth.
5 Bad Money Habits
These habits are the most common ones that most people have in their lives. The fourth and fifth habits are the most important and the toughest ones to knock out.
We’ll discuss what these habits are, how do they impact your lives, and how to get rid of them so you can begin your journey towards riches. Let’s get rolling!
1. Relying on Credit Cards to Pay Bills
You should never spend the money that you don’t have. Credit culture in America is growing at an unstoppable pace, and people are spending credit money as if their own.
Many people don’t even pay their credit cards and accumulate debt, and then they have to pay interest on it. The only one who benefits from this is the banks and big institutions.
Why do you think the banks hide the fact that you’re paying interest on it? Why don’t they push you to pay your credit cards? Simply because they benefit from it.
The reason why the government doesn’t educate you on financial literacy is because there are big corporations that are just built on the fact that you don’t know you should not be relying on credit to pay for your living expenses.
The first step you can take to knock out this bad habit is to stop using credit cards altogether for some time to get yourself to stop pulling out that credit card every time.
You can easily rely on a debit card or cash for your expenses, and once you develop the right habit, you can get your credit card back.
2. Spending on Things That Aren’t Investments
On social media, the idea of being rich or wealthy is about having a Lamborghini, buying expensive things, and even flushing money down the toilet, but that is not what the real wealthy people do.
Real wealthy people, like the Warren Buffet type, actually live very modestly. They only spend money on things that really add value to their lives.
You should also try to limit your spending to only the things that are going to add value to your life or your business, buys you more time, or enables you to make more money in the long run.
Now, it is nowhere said that you shouldn’t enjoy luxury in life. Buying a Lamborghini is not the wrong thing to do, but spending on luxury when you’re struggling with your needs is certainly not the wise thing.
Until you don’t have an abundance of money sitting in your bank account, you should always try to limit the spending on things that are not necessary.
So the next time when you’re going to buy that new shiny object, think twice because you can put that money into investments that will make you more money in the future.
If you can’t find anything that is going to add value to your life, instead of buying that new Apple phone, you can put the same money into the Apple stock that will hopefully grow several folds in the future.
3. Not Being Prepared For an Emergency
You cannot even start to think about investing or buying things that you want if you don’t have money in your emergency fund.
What is an emergency fund? An emergency fund is the money you set aside in a separate bank account to deal with unexpected catastrophic events in your life.
You must have enough savings sitting in the emergency fund that covers you if you lose your job, if the economy goes down, or you get scammed by some shady prince in Nigeria. There are countless ways you could find yourself in an emergency, so you have to be prepared.
This is the first lesson in financial literacy or the first step of a sound financial plan, and it can’t be stressed enough how important this one is.
Not having an emergency fund will not only add stress to your life but cause you to make wrong decisions in your investment journey.
When you invest with the money that you might need in the short term, you’re more afraid of losing it. The fear of losing your money will lead you to make decisions based on your emotions, which is the last thing you’d want as an investor.
So before you even think about investing, set aside an emergency fund that will not only help you during unexpected times but will also help you invest freely.
Now, we know it’s easier said than done, and that’s the reason we have put together an on-demand masterclass for you that you can register for from this link.
The masterclass will teach you the basics of money management that are a must to learn before you can begin your investment journey.
Also read: Financial Planning Before Investing in Stocks (8 Steps)
4. Not Making Your Money Work For You
So you got your emergency fund set up, you got rid of the bad money habit of spending on unnecessary things, and you’re not using credit cards for your living expenses. Now, you’re having an excess amount of money, and you’ve kept it in your bank account.
Well, that is another bad habit. Your excess amount of money needs to be working for you rather than sitting in your bank account.
The circle of wealth is: making cash, saving for your emergency fund, and then having the rest of it working for you to create more wealth. In simple words, investing.
How many successful entrepreneurs or lottery winners do you know who are now broke. How many people do you know who have awesome jobs but have no money? That’s because they don’t get their money to work for them.
The only path to true wealth is if your money is working for you and growing on its own because there’s a limit to how much you do yourself to grow it.
The sooner you get started with investing, the better off you are in the long run. You can’t wait until you have a huge amount of money or a lot of knowledge.
You can literally get started with just $500 and keep on adding to it every month. Just see how much money you can save on things that you don’t really need on a monthly basis, and automatically put that money into your investment account.
5. Making Yourself Believe That Money is Evil
It is more of a psychological thing than a habit, and that is making yourself believe that money is evil and you don’t need it.
The media and many people related to religious studies have made us believe that money is the root of all evil, and even the Bible says that.
But technically, that is incorrect because the Bible says that the love of money is the root of all evil, which is very different than money itself.
Money is kind of like a hammer, which can be used to smash your thumb but can also be used to build a house. So the hammer is just a toll, not the evil, and so is the case with money.
If you’re finding yourself overspending on clothes, shoes and restaurants when you should be planning for a secure retirement, or making sure your kids can go to college, then the issue isn’t that money is evil but your spending habits are just out of control.
A bonus subtitle for “money is the root of all evil” is “money can’t buy happiness.” You might have heard both of them a lot of times.
While it’s true that if you’re not happy within yourself, no amount of money is actually going to be able to buy you happiness, but it can buy you healthcare, a roof over your head, electricity, water, groceries, and anything you need to live peacefully. It can even buy you enjoyment if you’re interested in that.
The main problem with having this deep negative belief about money is that you’re going to unconsciously reject money, which will keep you poor forever.