The list of human desires is never-ending. We crave a variety of items that may or may not be
good for us, for example, we rush to satisfy our cravings as soon as we can afford them.
This is how billions of people all across the world act. Their lives revolve around
gratifying their desires rather than focusing on what they genuinely require.
This attitude toward money may bring a temporary grin to our faces when we obtain the objects we
so much desire, but when we are unable to pay for the most essential things in our lives,
we are confronted with the reality of our actions.
Have you ever taken a step back to consider why you're always broke? Where does all of
your money go regularly? And why, two weeks after receiving your income or paying yourself,
your bank account is mostly in the red?
If you find yourself in this predicament, and can't figure out what's going on with your money,
here are some habits that will keep you impoverished even if you have a good job:
1. You Don’t Have a Budget or Keep It Up to Date How can you know how much money you're making,
spending, and saving if you don't have a budget? It’s quite difficult to achieve your financial
goals without a budget. A budget is all about understanding how much money you make,
so you can set spending goals and maybe save money. Simply being aware of how much you spend
can help you spend less since you become more aware of it. You must also keep your budget
up to date and make modifications as you go. If you didn't grow up in a household where solid
financial habits were instilled, creating a budget is the first step toward financial literacy.
2. You’re Not Aware of Your Spending Habits Do you have a habit of overspending on
restaurants but underspending on groceries? This terrible habit that makes you broke
usually goes hand in hand with a lack of a budget. While you may not be able to modify how much money
you make in the near future, you can certainly change how much money you spend. Expenses that
are more wants than needs, such as eating out, entertainment, and other non-essential expenses.
When you don't know how much you've already spent, it's much easier to spend more.
You can also be hyper-focused on certain areas when making purchases
if you know where you tend to spend too much money.
3. You’re Spending Too Much Money on Stuff You Don’t Need, such as Impulse Buys
Have you ever purchased something and never used it?
We've all made purchases that make us wonder, "Why the heck did I buy that?"
What if I told you that on a planned shopping trip, buyers are 13 per cent less likely
to make impulse purchases, whereas, on an unplanned shopping excursion,
they are 23 per cent more likely. Companies are really good at what they do,
and they spend a lot of time trying to figure out what makes people buy more things in their stores.
And guess what the key is? Well, shopping on the spur of the moment! Of course.
I want you to take a look at the layout of your local Walmart the next time you go.
Have you ever noticed where milk and eggs are kept at supermarket stores? In the back of the store,
to be exact! This forces you to walk the length of the store only to get the milk or eggs you need.
What are the chances that someone will be able to walk past all of those items,
without succumbing to temptation? Companies also try to entice you to make
impulse purchases by placing products near the cash register. People usually wait a few minutes
to get checked out at a register. Customers are more likely to buy something while they wait if
products are placed there. It's nearly impossible for a mother to go through the registers without
their youngster asking for anything. When you make a list or a plan,
you have a better chance of sticking to it. Using a written list when shopping will save you time
and money. If you're looking for a way to save money, this is the way to go!
4. You Hold On to Stuff Giving You a False Sense of Wealth
Have you ever visited someone's home and found it to be overflowing with
belongings? Or perhaps you're the one who has a lot of stuff in your house.
When someone buys a lot of items and keeps them in their residence,
it can give them the impression that they are wealthy. Owning two cars,
a tool-filled garage, a boat, snowboards, bicycles, and decorations galore...
This is something that can go on for a long time. And, if you do this,
you may believe you are wealthier than you are. You have the delusion that because you bought
everything, I must be financially secure. If you believe that having a lot of stuff
shows you're affluent, buying goods is one of the habits that will keep you broke.
Your wealth is determined only by the amount of money you have in investments and assets.
5. Buying Cheap or Quantity Instead of Quality Have you ever purchased something just to
have it break and force you to replace it? This is something we've done before. Rather than
spending more on anything, we opt for the less expensive option. However, it eventually breaks,
necessitating the purchase of a new one. Sunglasses are a good example. You purchase
a low-cost pair and drop them, promptly breaking them. It's time to go out and get another pair of
cheap shoes. What if you only got one great pair and it lasts longer than all of your cheap ones?
In the long run, you'll probably be better off investing in high-quality things,
including food. You're also more inclined to look after more valuable objects.
What does it matter what happens to your $25 sunglasses?
But what about the lovely pair of $150 shoes? You may end up paying more money
in the long term if you buy cheap. It's the same with quantity. Why spend the
same amount on five quality t-shirts when we can get 20 for the same price?
However, you'll most likely only wear five shirts, and those five shirts may even outlast the 20.
6. You Don’t Have Long-Term Goals or Your Goals Are Vague
This is most likely more prevalent among younger individuals, but it happened
to us as well. Either you don't have any goals at all, or your goals are imprecise.
If you don't have any financial ambitions, you're more likely to be careless with your
money. You have no motive to spend less or save more if you don't have any ambitions.
What about goals that aren't specific? One day, you'd like to retire. That's great.
What steps do you need to take in order to retire? You'd like to get
rid of your debt. That's great. What steps do you need to take, to get out of debt?
Hopes and dreams are not goals. It all comes down to conducting some research and defining
clear goals. You're more likely to spend your money on things that aren't beneficial in the
long run if you have no aims or have ambiguous goals in either scenario.
It's a lot simpler to tell yourself, "I'm not going to buy that because
I need to put this money towards my debt," when you have precise,
targeted goals. Specific objectives give you a purpose to think about how you spend your money.
7. You’re Not Investing Extra Money Do you have a savings account with a low-interest
rate? If so, what's the reasoning behind it? If you don't need the money right away,
you should put it into assets that will provide you with a better return.
Banks strive to keep your deposits (cash) for as little money as possible.
It is the means by which they can earn money. As a result, avoid keeping your
money in cash or a savings account. Put your surplus cash to good use. It's one of the few
techniques to increase your net worth. Investing entails a degree of risk.
However, without investing your money, you are unlikely to reach your financial objectives.
8. You Don’t Pay Off Your Credit Card Balances One of the worst behaviours that can keep you
broke is carrying a credit card balance and paying interest. Credit card interest rates
can be extremely damaging to your finances, requiring you to pay more money on interest
each month. You should try to pay off your credit card amount each month if you can.
Some people are just unaware that they are wasting money because they believe
they only need to pay the bare minimum. Or they aren't aware of how much money they are
wasting on interest. However, many people have problems paying off their credit card debt.
If you're having trouble paying off your balance each month,
you might need to make a temporary plan until you can pay it off.
It may be necessary for you to limit your spending to the bare necessities until the
card is paid off. However, you will save money because you will no longer be paying interest.
9. You Don’t Have a Financial Plan While you may mistakenly believe that
a financial plan and a budget are the same thing,
they are not. One of the habits that may be keeping you broke is not having a financial plan.
A budget is primarily concerned with the coming month or quarter, but a financial
plan is concerned with the coming decade. Your financial plan should serve as a
blueprint for achieving your financial objectives. It should detail how your
investments are projected to perform over time and how you want to accumulate money.
10. You Don’t Feel Confident Discussing Money Unfortunately, many of us are apprehensive
about discussing money and finances. Because it is a negative mindset, this behaviour
may keep you poor. The majority of us did not grow up in a household where financial literacy was
valued. You undoubtedly recall studying about cellular structure and the variations between
plant and animal cells. Compounding interest and debt amortization, however, were not included.
This has resulted in a lack of confidence when it comes to discussing money and finances.
But, if you're terrified of money, how will you reach your financial goals? You gain confidence
once you understand the fundamentals of money and realize that a lot of it is determined by how you
spend and save. That self-assurance is crucial to achieving the financial status you desire.
11. Increasing Your Expenditure As Your Income Increases
When most individuals start earning more money, they typically upgrade their housing,
get a nicer automobile, purchase more costly clothing,
take more holidays, and enrol their children in more expensive schools, among other things.
While increasing your level of living as your income rises is a good thing,
exaggerating it may leave you with little more than what you had before.
If you ever want to get out of the rat race and onto the fast track,
you'll need to improve your saving and investing habits. This means that if your salary rises, you
will be able to improve your standard of living by a fraction and have more money saved aside.
12. You Don’t Value Your Time This was the last one we wanted to do. One of
the most valuable commodities you have in life is your time. We trade time and skill for money when
we get a job. However, it is easy to establish or already have the tendency of not appreciating your
time. Participating in surveys is a prime example of not appreciating the value of your time.
Consider what you could be doing instead of spending that small sum of money.
If you truly want to generate more money, you should use the time you spend filling out surveys
on improving your skills and knowledge. Your most valuable asset is your time.
It can be used to construct something or to learn something new. Consider what else you could have
done with those ten hours if you hadn't spent them filling out questionnaires. Concentrate on the big
picture rather than the details. A survey may pay you $5 today,
but learning a new skill could pay you $5 more per hour for the rest of your career.
My final thoughts on this list; you're broke because of a number of terrible habits.
The idea is to be aware of them and to strive to develop wealth-building habits.
So, thank you all so much for watching. If you enjoyed or found value in this video,
do give it a thumbs up and subscribe for more content like this.
With that said, have a great day and I’ll see you all in the next one.