10 Poor Money Habits & How to Fix Them

Money habits can be either good or bad, and the mindset you develop along with those habits is crucial. I am sharing ten money habits that create habits of the poor mindset. Don't get caught in these money traps.

1. Wants vs. needs

Wants and needs can be harder than you would think to distinguish. Say I really want a new purse but already have a functional purse. I can consider it if I have enough free money to pay for that item. I try to evaluate every single purchase to see if I need it.


Would life go on without it? Could we still eat and stay warm without it before buying something that I think would be nice? I want to avoid those things I don't need that are pure wants. Yes, a new coat is beautiful, but I have a functional warm coat at home that I can use instead.


2. Not capping impulse spending

The number two money habit that can keep you poor is not having a cap on impulse spending. Impulse spending is where we can get in the most trouble and thoughtlessly, spend the most money.


We manage that in our house because we each have blow money every month, and we can spend that on whatever we want. That discretionary money is vital for your quality of life, but having a cap on it when budgeting is also essential.

Buying lunch

3. Buying lunch

If you go to work and at lunchtime, you end up going out to eat every single day or going out and grabbing something, this adds up. Even if you make fancy food at home and bring it to work, it's always guaranteed to be less expensive than buying lunch every day.


If you're spending $10 every single workday, before you know it, you spend about $300 a month. What could you do with $300 extra dollars a month?


4. Discounting small changes

It doesn't seem significant if you make one small change, but those small changes add up over time. Say you start packing your lunch. So now you're saving $10 a day. Then you negotiate your phone bill down, saving $30 a month. Then you look at canceling unused subscriptions and save $10 a month there. All of these things add up.


5. Keeping your savings where you can spend it

Another habit that keeps you in a poor mindset is keeping your money where you can see and spend it.


Maybe for you, the cash in your wallet burns a hole in it, so don't keep cash in your wallet. In our checking account, we want to get any extra money out of there to the place it needs to go, like the investment or savings accounts.


Wherever we're going with that money, we want that to happen as fast as possible. So watch out for that loose money just hanging out before it goes to its final destination.

Calculating business expenses

6. Not accounting for all business expenses

When I see moms start a small business because they need side income but don't account for the expenses it's taking to run the business, I often see them come out net negative or maybe positive, like $100.


So any business venture you are considering, be sure to count the costs and expenses to keep up with that or buy the materials or whatever it is. Watch out for and track those expenses and ensure this is worth your time and energy.


Also, remember that just because something is a tax write-off as a business expense doesn't mean you don't have to pay for it.


7. Not canceling subscriptions you don't use

This is a pain-free lifestyle change giving you a way to save money. Look at your subscriptions or services and see if they add value to your life. Is it worth it, or could you cancel it?


Also, look at the other things you subscribe to, like your internet. Can you change your internet and save money? You're looking at things that would be easy to cut out, which can be a great way to save money.

Having fun spending money

8. Thinking spending money is the only way to have fun

The poor mindset thinks you only have fun when you're spending money. Instead, develop as many ways to have fun that are free.


A game night potluck with friends or going on a walk or a hike, stuff like that. Developing those habits and activities that you consider enjoyable but don't cost a dime are a way to get out of the mindset that keeps you poor.


9. Not learning new skills for how to fix things yourself

No one comes out of the womb with all the DIY skills in the world. For everything we don't know how to do, there's the YouTube Academy. You can learn so much on YouTube and save yourself so much money.


I have learned some great skills, like changing outlets, and I do lots of painting, and my husband can install flooring. When you have to hire someone to take care of your house or fix things, it is expensive because labor is expensive.


If you are fixing a $30 appliance and it takes 5 hours, you're working for $6 an hour, which is probably not worth it. Be sure to check the numbers to make sure you're saving yourself money.


10. Stopping your education wherever your formal education stopped

However far you go in your education, money skills are rarely taught. You need to take responsibility for teaching yourself more about money. Maybe learn about one thing a year.


Maybe watch a couple of financial YouTube videos to learn new money habits. Learn about your taxes, learn about rental properties, whatever it is, and don't forget that you need continuing money education.


Money habits that keep you poor

The mindset and habits of the poor can be changed. Use some or all of the suggestions above to begin changing. Which money habit will you be working on this year? In the comments below, share your ideas for changing habits that keep you in a poor mindset.

Comments
Join the conversation
Next