8 Money Habits That Are Keeping You Broke
Do you ever feel like you lose track of your money? Well, your mindset plays a huge role in how you manage it. In this post, we’re going to talk about money habits that are keeping you broke and how to change them!
Not having a budget
I frequently hear people say something like “I don’t need a budget because I know what I spend money on.”
If you don’t have a budget, then there is no way to track where your money goes.
You might think you know how you spend your money, but I can confidently say that you would be surprised on how much you spend on things like restaurants, groceries, and shopping.
Having a working budget is one of the most important money habits someone should have.
A budget allows you to make a plan for your money, and ensures that you have enough to cover mandatory expenses. A budget also helps you stay out of debt, and help you work your way out of debt if you are currently in it.
Check out this post to learn how to start a zero based budget today!
Living Beyond Your Means
This goes without saying, but if you spend more money than you have, you won’t have any money to save.
Signs you are living beyond your means include carrying a credit card balance, lack of an emergency fund, no or limited savings, and feelings of nervousness or anxiety toward spending money.
If you want to stop being broke, you need to start living within your means. This post is full of tips and ideas on how to live frugally!
Making impulsive purchases
You’re at the store, you see something that sparks your interest, and suddenly you make the purchase. You didn’t plan on buying anything, and probably didn’t even really need what you bought anyway.
We’ve all been there.
But convincing yourself that “you deserve” an unplanned purchase is ultimately working against your financial goals.
When you see something you like at the store, add it to a wish list and wait 30 days before making the purchase. This will ensure that you actually want it before spending any money and that you set aside funds for the expense.
Not Having An Emergency Fund
An emergency fund is important because it allows you to cover the costs of emergencies without going into debt. Emergency funds are used for things like unexpected car repairs, medical costs, job losses, etc.
Most experts recommend saving at least three month’s worth of income for your emergency fund.
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Buying things for the cheapest price instead of value
Many people believe that buying the cheapest item will save you money, but that’s not always the case. When making a purchase, it’s important to consider things like frequency of use, quality, and reliability. If you don’t, you may end up never using the item or spending additional money on a replacement.
Make sure to spend time researching different brands and reading customer reviews before making a purchase… especially if it’s a pricier item.
Not setting money goals
Money goals help you work towards financial security, retirement, and keep track of what you’ve earned. If you don’t have money goals that you’re working towards, then you are more likely to spend more money than you should.
If you’re not sure what money goals you should be setting, check out this post on Financial Goals for Your 20s that Will Change Your Life.
Nervous about discussing money
A lot of us are afraid to talk about money.
We don’t want to be rude, judged, or stand out.
But how are you supposed to learn, teach, or share information about financial management if we never talk about it?
How are you supposed to ask for a raise or charge for your services if you feel nervous about discussing money?
When we make money a taboo topic, we are ultimately maintaining the status quo of our personal finances.
Think negatively about money
Money mindset is an incredibly important part of financial success. After all, our thoughts drive our behaviours, and our behaviours drive our actions.
If we think negatively about money, that negativity can create stress, anxiety, and a barrier to achieve your financial goals.
Some examples of negative money thoughts include:
I’ll never get out of debt
I’ll never be able to afford that
I’ll never make as much money as …
If you find that you are negatively thinking about your finances, try to refocus your thoughts on what you have, forgive yourself for past mistakes, set financial goals, and pursue financial education and learning.
Final Thoughts
Our money habits drive our financial behaviors, which is why it’s so important to assess them and their impact on our finances!
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