Spending Habits That Keep You Poor

Last year, I started the year with a full bank account. I made a lot and often checked my account in awe because I couldn’t believe what I saw sometimes. 

But as the year progressed, I soon started living paycheck to paycheck. I was perplexed when I realised how much I was suffering. 

If someone had given me a prophecy that I would have a bad year, I would have denied it because I started the year on a high note. 

Anyway, I was forced to reflect on my spending habits when I had a lot and realised that my current state was my fault. So, gradually, I started inculcating habits to change my situation. 

I wrote this blog post because I figured others were making the same mistakes I made and could learn from me. 

You may wonder why your finances don’t add up even when you earn well enough. This post will show you the spending habits that keep you poor. 

10 Spending Habits That Keep You Poor

1. Not Saving

One of the first pieces of advice any financial expert will give you is to save. That is because you cannot overcome money problems without saving. 

Living paycheck to paycheck is a stressful cycle many of us get stuck in. 

You earn money and spend it all; before you know it, you’re waiting for the next paycheck to keep things going. 

Sometimes, you even take loans because you need to survive before the next paycheck, compounding the problem. 

So when the next pay comes, you take a large portion of it to settle debt and then may take another loan to sustain yourself. 

You see what I mean? It’s an unhealthy cycle that you should avoid like a plague. 

If you haven’t gotten to the point of taking loans but spend all your money before the next payday, you must change before the situation deteriorates. 

Firstly, make a habit of saving when you get your pay before spending on anything. 

Secondly, it doesn’t have to be a significant amount. Start small by saving just a little bit each month. Even $50 or $100 stashed away can make a difference. 

The goal is to create breathing room so you do not rely on your next paycheck to cover the basics. A budget can help you figure out where to cut back without feeling deprived.

2. Impulse Buying

I love shoes and often struggle to take my eyes off a good pair when I come across one. 

It didn’t help that I wear the average female size, so I don’t lack options. 

But it caused a dent in my pocket. 

Now, I don’t know what you indulge in, and it doesn’t matter, but you cannot continue buying things just because they appeal to you. 

You can do without it if you don’t need it and it is not in the budget. 

What I often ask myself is, ” Will this particular thing matter two hours from now if I scroll past this vendor’s page or walk past this store?” If it won’t, then I don’t need it. 

Will it be more important that I saved that money? If yes, I shouldn’t buy it. 

Trust me, it is still a struggle, so I understand if you have challenges, but you will get better with practice. 

Another method is to take a 24-hour pause. This gives you some time to consider whether you really need or want that item. 

If the excitement wears off, it wasn’t meant to be. 

Additionally, when you go shopping, keep a list of things you actually need so it can keep you focused.

3. Relying on Credit Cards

One of the spending habits that keep you poor is total reliance on credit cards.

Credit cards can be helpful but can also become a trap. It’s so easy to swipe for things you can’t really afford, and before you know it, you’re paying off debt with crazy high interest rates.

I will advise you to stay away from credit cards if you can. 

If not, use credit cards only for things you can pay off in full each month. 

If you’re already in credit card debt, start paying more than the minimum. 

It’ll hurt a bit now, but trust me, your future self will thank you when you’re not paying extra interest or have a good credit score. 

Also Read: Financing vs Paying Cash: Pros and Cons

4. Neglecting to Budget

Let’s be honest: budgeting doesn’t sound like fun. However, not having a budget is the worst thing that can happen to an adult. 

This is because it’s easy to overspend without one and wonder where all your money went.

You may often look back and not find anything substantial you used your money for because you can’t keep track of it. 

That’s what makes budgeting so fantastic; it helps you keep track of your finances. 

Creating a budget doesn’t have to be complicated. You can start by tracking your income and expenses for a month. 

Use budgeting apps or even a simple spreadsheet to categorise your spending. 

Once you see where your money is going, adjusting and staying on track is easier.

5. Overspending on Lifestyle Choices

We all want to live well, but sometimes, we stretch ourselves too thin trying to keep up with an expensive lifestyle. 

This happens, especially when you start making an amount that makes you feel invisible. 

But it can disappear in the blink of an eye if not properly accounted for. 

So, you must train yourself to live within your means. 

Do you really need luxury fashion when there are more affordable options? 

Do you need fine dining when you can cook your meal? 

Do you need to keep up with every latest iPhone release? 

The answer to all the above is no, you don’t. 

Don’t be deceived into thinking you can’t love nicely if you are not buying luxury things. 

When you are a millionaire, you can indulge in one or two. 

But for now, practice delayed gratification. 

This doesn’t mean you can’t splurge occasionally, but make sure it’s within reason. 

What I do now so it doesn’t seem like I’m missing out and then feel the need to overindulge is treat myself to something once a month. 

When I get my pay, I pay my tithe and save. Then, I settle all monthly bills and set money aside for monthly expenses, including food. I shop for food monthly, so I do that with the food money. But other minor expenses could come up in the month, so I keep the money for that. 

Then, if I have any extra left, I use it to treat myself. If I’m not feeling like it that month, I save it. 

6. Not Saving for Emergencies

The importance of having an emergency fund cannot be overemphasised. 

Life happens – cars break down, medical bills pop up, or unexpected home repairs are needed. 

If you don’t have an emergency fund, these surprise expenses can throw your whole financial life into chaos.

Saving an emergency fund might seem like a huge commitment, but you can start by saving something small. Even $500 can make a big difference. 

Eventually, aim for 3-6 months’ worth of living expenses. Set up an automatic transfer into a separate savings account so you won’t be tempted to dip into it for non-emergencies.

Also Read: Wise Reasons to Save Money for the Future

7. Spending More Than You Earn

Another spending habit that keep you poor is spending more than you earn.

It’s easy to fall into the trap of spending more than you bring in, especially if credit is readily available. 

But consistently living beyond one’s means leads to debt, which can be a tough hole to climb out of. You need to live within or even less than you earn. 

Take a hard look at your monthly expenses and compare them to your income. If you’re consistently in the red, it’s time to cut back. 

Look for ways to reduce your expenses while you work to increase your income. You can do this through a side hustle, asking for a raise or upskilling to qualify for a promotion or get a better job. 

8. Ignoring Small Expenses

You’d be surprised how much those small expenses add up. A coffee here, a subscription service there, and suddenly, a chunk of your income is gone.

This is why budgeting and keeping track of your expenses is important; small expenses add up fast. 

Try to keep track of the small things you spend money on. If you notice one eating into your income, it’s time to cut back. 

That doesn’t mean you never buy it again but reduce the frequency. 

One particular one we need to pay attention to is subscriptions. Many of us have subscriptions we never use; you shouldn’t waste money on something that is of no use to you. 

Go through your subscriptions and cancel the ones you don’t use. These little adjustments can free up money for savings or other important goals.

Also Read: Common Financial Mistakes to Avoid for a Wholesome Life

9. Buying Things to Impress Others

It’s easy to get caught up in buying things to fit in or to look successful, whether it’s the latest phone, a luxury car, or high-end fashion. 

It’s even more common in this social media age, where everybody wants to look the part. 

But when you’re buying to impress others, you often sacrifice your financial health. So, focus on what makes you happy, not what you think will impress others. 

It might sound cliché, but the key is to learn to be content with less and ignore the pressure to keep up with others. 

Be mindful of the purchases you’re making for the wrong reasons.

10. Avoiding Financial Education

If you don’t understand how money works, you will likely make decisions that keep you stuck. 

Many people don’t invest because they think it’s too complicated or avoid budgeting because it seems overwhelming.

But these things are necessary for a financially healthy life. 

So, commit to learning more about personal finance. Take advantage of the tons of free resources online. 

The more you know, the better decisions you’ll make. 

These habits may be common, but they define your financial future. 

By making small, consistent changes, you can break free from the habits that keep you poor and start building a path to financial security.