There are different types of people when it comes to finances.
- Those who are living paycheck to paycheck.
- Those who are not doing the above but spend all they have without a thought of tomorrow.
- Those who are gradually building their wealth.
If you ask many people the category they want to fall into, they will tell you the last.
However, let’s be honest, how many of us are actually taking active steps to achieve that goal? I know I would have said the same when I was eating into my savings and spending without budgeting.
Now, I know some people might even argue that it’s because they are not making enough.
And although that is true to some extent, building real wealth is not always about how much you make, but how you manage it.
Some everyday money habits can quietly drain your finances and leave you stuck in the same cycle. You need to break those habits if you want to experience real change in your life.
So, come along with me as I help you break these bad habits once and for all, so you can watch your wealth grow.
10 Financial Habits to Break to Get Rich
1. Living Above Your Means
From experience, I will tell you that one of the fastest ways to stay broke is trying to live like you earn more than you actually do.
I understand that you might want to eat out every Friday, but if you cannot afford it now, then you shouldn’t.
Rather, see it as a dream that you can fulfil when you increase your wealth.
One thing most of us struggle with is delayed gratification. The fact that you cannot afford something now doesn’t mean you will never be able to, as long as you are putting in the work.
In fact, if you are living above your means, you are likely never to afford that luxury comfortably.
If you consistently eat up your entire salary – or worse, rely on credit to cover your luxury – you’ll always be stuck.
So you must learn to enjoy a lifestyle that’s comfortably within your income range. Learn to say ‘no’ to some luxuries today so you can afford bigger goals tomorrow.
Then, leverage your desire for those luxuries as motivation to put in the work so you can afford to enjoy them tomorrow.
2. Not Having a Budget
When finances are being discussed, budgeting always seems like a cliche that is not necessary. But the truth is that if you don’t have a budget, you’re practically inviting your money to misbehave.
This is because not only will you not be able to measure how you spend money, but you will let your money run wild because you won’t be able to tell it where to go.
The first way to combat this is to stop seeing a budget as a punishment; see it as a plan that helps you control where your money goes instead of wondering where it went.
Sit down each month, write out your income, list all your expenses, including those sneaky small ones, and set realistic limits.
Set a particular amount to go into savings and investments, and you can even automate it so you don’t have to think about it. That way, the money leaves your account every month and saves you the hesitation.
Then, budget a larger percentage for your needs (including bills and food), and paying back debts if you have any. If you have money left, you can set that for your wants and miscellaneous or even save more.
These practical steps will help you see your money clearly and use it more judiciously.
3. Impulsive Spending
I know those spontaneous purchases feel so good in the moment. But over time, impulsive spending keeps you from building wealth.
Before you know it, you’re broke with a closet full of stuff you barely use.
If you don’t want that to keep happening, train yourself to pause before buying.
A good rule is to wait 24 hours for anything that’s not urgent. This simple trick helps you buy intentionally, save more, and feel in control of your spending habits.
4. Overusing Your Credit Card
I don’t support using credit cards except in absolutely necessary situations because they are so convenient, you won’t know how much you are spending until it’s too late.
That’s why you cannot afford to treat them like free money, or else, you will be setting yourself up for debt trouble.
And if your repayment plan is to pay only the minimum, the interest will pile up fast, costing you way more than the original purchase.
So the best thing is to use your credit card wisely in the first place. Use them only for planned expenses you can pay off in full each month, or at least, very necessary emergencies.
This builds your credit score without burying you in debt.
If you can’t pay for something with cash, you probably shouldn’t swipe for it either.
5. Not Prioritising Paying Back Debts
If wishes were horses, debts would magically disappear. Unfortunately, that’s not how it works. Debts don’t disappear without a plan, and they quietly eat up your income, especially as they come with interest payments.
So, if you keep postponing repayments, interests will pile up and you’ll pay back much more than you borrowed.
It’s best not to be in debt, but we all know it isn’t always easy, so if you are in one, make debt repayment a priority in your budget.
Tackle high-interest debts first while making minimum payments on the rest. Once you clear one, roll that amount into the next debt.
Or you could try the snowball method by paying the smallest debts first and working through all your debts until you’ve settled all.
The important thing is to have a plan to clear debts faster and free up cash for savings and investments.
6. No Savings and Investments
Many people assume they’ll start saving when they earn more, but that day rarely comes without discipline.
You must see saving and investing as non-negotiables, no matter your income level.
I mentioned this earlier when showing you how to budget, but let me reiterate that you should pay yourself first – set aside a portion before spending on anything else.
Save first before spending, or you will likely never save.
Depending on your income, from the savings, you can invest a little. If you have more to spare, then save some percentage of your income and invest some as well.
You can even start with a savings account with high interest, before learning about investment options like mutual funds, stocks, or real estate.
Also, make sure to do both short-term and long-term investments, to get immediate returns and also to plan for the future.
Also Read: Wise Reasons to Save Money for the Future
7. No Emergency Funds
As much as we don’t wish them, life loves surprises. It could be car repairs, medical bills, or sudden job loss.
Without an emergency fund, these surprises can wreck your finances and push you into debt. So, make sure to set something aside every month to build your emergency fund.
A high-interest savings account is always best for this, so you can get a little extra something on your money as well.
And when I say high interest, I don’t mean Ponzi schemes or obviously dubious financial companies; I mean a verified financial company that can give you a reasonable interest on your savings. So make sure to be sure of where you save your money.
That being said, aim to save at least three to six months’ worth of living expenses in that separate account and make sure not to touch it unless it’s truly an emergency.
This cushion keeps you afloat during tough times and protects your long-term savings from being wiped out overnight.
8. No Insurance
Insurance might feel like an unnecessary cost until you really need it. Like I said earlier, life loves surprises.
So, accidents, illnesses, or property damage can drain your savings faster than you can rebuild it.
But basic health insurance, life insurance, and home or car coverage can save you from financial ruin. It is a safety net that you hopefully never need, but you will be glad you have when life happens.
9. Ignoring Financial Education
Many people think financial literacy is boring or too complicated, so they ignore it, but ignorance is expensive.
You are better off having knowledge about managing money and building wealth.
So, take time to learn about personal finance basics, such as budgeting, investing, debt management, and retirement planning.
You can read books, watch videos, or take short courses online. Trust me, the more you know, the smarter your money decisions become and the surer your path to building wealth.
Also Read: 10 Money Management Tips to Be Successful with Money
10. Dipping Into Savings
Many of us save a little, then dip into it for a new phone, vacation, or impulse buys; soon, you’re back to square one with nothing to show for your efforts.
This is one of those important financial habits to break if you want your money to grow. You must treat your savings as untouchable unless it’s a true emergency or a planned goal like a house deposit.
If temptation is too strong, move savings to an account that’s not linked to your spending card and one that makes it difficult for you to withdraw – not impossible, though, as you need to be able to withdraw in case of an emergency.
You cannot build wealth if you are not protecting your savings, so you need to put practical tips in place to keep your savings intact until you really need them.
FAQs
What are the top 3 financial habits?
The top 3 financial habits are:
- Living within your means – spend less than you earn
- Saving and investing consistently — pay yourself first, then grow your money.
- Budgeting and tracking your spending — know exactly where your money goes so you can control it.
If you master these three habits, your bank account will thank you. While everyone’s finances are different, these three solid money habits almost always lead to financial success.
How do I turn my life around financially?
You can turn your life around financially by starting where you are. Don’t wait for the “perfect moment” as it never comes. First, get real about your income and expenses: track every dollar or pound for at least a month. Next, create a realistic budget and commit to living below your means. Cut unnecessary spending, pay off high-interest debts, and build an emergency fund. Finally, focus on growing your income and learning how to invest wisely. Then you need patience and discipline and you will soon be in a better financial situation.
How to fix bad financial habits?
Fixing bad money habits starts with being aware of your state and accepting it. Identify what you do wrong (like impulse spending or ignoring your budget). Next, swap each bad habit for a better one. For example, delay impulse buys for 24 hours or automate your savings so you’re not tempted to spend first. Also, set clear financial goals and remind yourself of them often. Moreover, surround yourself with people, books, and content that encourage healthy money choices.
How can I be financially independent without a job?
Being financially independent without a traditional 9–5 job is possible, but it requires planning and discipline. Start by building multiple income streams; consider investments, starting a small business, freelancing, or earning passive income through digital products or content creation. Live below your means and reinvest your profits to grow your wealth. Most importantly, focus on skills and assets that generate money even when you’re not actively working.
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