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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

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