5 'Normal' Money Habits That Keep You Poor

Normal habits that make people broke.


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Over 40% of our daily actions are just mindless and habitual. And when it comes to personal finance, the percentage is probably much higher because many people make illogical financial decisions. In this video, I share five common money habits that people have the end up making them poor.

1. Spend Credit, Pay Off Debt

Many people choose to spend money they get from a credit lender in the form of a credit card or a loan, and this causes the prices to be inflated because the interest rates from these credit lenders are often high. A person might spend $575 on a TV using credit compared to spending $500 using their own money. To avoid this toxic financial habit, it is important to have patience in your life. It is important to take the time to save money and once you have enough money saved, then you can buy whatever you want without having to pay high interest rates.

2. Setting ‘No Money’ at -$10,000

No matter how bad you are with money, there comes a point where you no longer can make irresponsible, careless decisions, and you are forced to cut your spending to save money. And this is because you no longer have any access to money and you have "no money." The interesting thing about this is the idea of having "no money" varies from person to person. Many people believe that "no money" is when all of their credit cards are maxed out, all of their bills are behind, and their bank is charging them overdraft fees. They believe that having "no money" is when they no longer have any options. To avoid this toxic financial habit, start making decisions to cut spending and save money before you go below $0.

3. Getting Banks To Tell You What You Can Afford

The financial crisis of 2008 happened because banks were lending money to people who couldn't afford to meet their monthly payments. And this financial crisis was partly due to banks being irresponsible with lending, but it also occurred because people allowed the banks to tell them what they could afford. Time has passed, but the banks are still handing out money to anyone who is willing to take it regardless if they can actually afford it. If you let the banks tell you what you can afford, you will probably be left with payments that make it impossible to get ahead. To avoid this toxic financial habit, it is important to be responsible, look at your own financial situation, and decide what you can afford to bring in your life.

4. Paying Yourself Last

Many people are very self-less with their money. Once they get their paycheck, they give all their money to people whether that's for paying rent, a car payment, bills, or other payments. And once they have paid everyone, there is no money left for themselves. To avoid this toxic financial habit, it is important to determine a specific amount of money to set aside each paycheck to save or invest before you start paying your bills. When you do this, your bank accounts will constantly be rising.

5. Not Investing In The Stock Market

Many people are afraid of the stock market and choose to not invest because they think that they will lose all of their money overnight. Instead, they put money in a savings account, and although this is important, if all of your money is just sitting in a savings account, you will lose money each year due to inflation. It is important to learn about the stock market and a simple type of investment called "index funds," so that you can grow your money over time.

My video on index investing:    • Index Investing For Beginners In 2024...  

**I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make. Links above are affiliate links where if you click and order, I will receive a commission at no cost to you. **