Some bad money habits to take note of.

One thing about habit is that once you are into it, you will find it hard to stop a bad habit, likewise finding it strenuous to cultivate a good habit but the reward is worth it. If only we can dedicate our time and focus on being the best because, in the end, we are trying to be better while taming those bad habits eating deep into our lives, thereby causing a lot of damage.

Another thing I have come to realize is that learning good habits when it comes to financial independence is the best decision we can ever make to build a stable lifestyle and work our future into a comfortable mode. Coming to the money aspect, there are some habits that when we do not check or work on them may leave us stuck forever in a cycle of financial struggle.

When determining our financial goals, the good and bad habits cannot be left ignored as they contribute largely and play a huge role in our future. When you stay glued to poor money habits, it can make you go broke by hampering your wealth and causing the wheel of financial instability to keep spinning over time.

Some of the common poor money habits I will be discussing here are as follows:

Lack of discipline in spending: One thing so crucial when it comes to spending is to be disciplined. One biggest culprit to making someone broke is not dealing with your spending. When an individual lacks discipline in spending, it makes such a person live paycheck to paycheck with little or no savings at all. Consider an individual buying coffee every day. A cup of coffee treat that costs $5 daily might seem harmless in the first place, but calculating this monthly would cost up to $150, and $1800 per year. In another way, brewing coffee daily by yourself would only cost pennies, thereby leaving more funds to attend to other expenses and giving room for savings. It is easier for your money to melt away when you cannot control how you spend especially on things not on your budget list.

Lack of Earning Power: Most individuals tend to stick to their low-paying jobs and are scared to seek more opportunities to increase their income. This will make such an individual go broke on time. One harsh truth in our society is that money flows towards skills and values. This means that if you aren't improving or working on your skills, aren't bringing or adding value, then you are not able to earn more at all. As an employee, there is a need to increase your value to your employer through skills, knowledge, education, and experiences to raise your earning power.

Lack of discipline at work: This also goes in line with your earning power. If you are in a job with bountiful or expansive growth opportunities, but without your dedication and hard work, your earnings will remain static. When an individual keeps missing deadlines on a project given to him or does not perform well at work might not likely receive any promotion or raises that are due him.

Lack of Financial Literacy: It is important for everyone to understand how to make money work for them and not just limit oneself to earning and saving alone. It is possible for someone who is not financially literate to save, but without understanding how to invest will make such individual to lose the potential for compound growth. Financial literacy is critical and it is something we cannot ignore when we are trying to build our financial life and make wealth. When it comes to money, knowledge is power. There are financial books like "The Richest Man in Babylon" by George Samuel Clason, "Rich Dad, Poor Dad" by Robert Kiyosaki, "Think and Grow Rich" by Napoleon Hill, and "I Will Teach You To Be Rich" by Ramit Sethi. I have read the first three books and they are greatly enriched with information on how money works.

Lack of not paying yourself first: I have been taught many times to always pay myself first and this can be done by removing a per cent of my income even before paying bills. One great lesson from the book, The Richest Man in Babylon that I learnt is to keep 10% of what I earn aside. A typical trap of money is when you only remember to pay everyone else, landlords, credit card companies, electricity bills and others before paying yourself. With this habit, there is the possibility that you will not be able to save or invest. When you pay others first instead of yourself, it leaves you with no option but to keep living paycheck to paycheck while struggling to build wealth. You should aim to save and invest part of your income before thinking of paying your bills. Though it might be hard and challenging to start with, you will come back to appreciate the step you took or have taken. Remember to put your name first on your budget to serve as a reminder for you.

Impulsive buying: This is an urge to an empty bank account. The arousal of a sale or the thirst for instant gratification can lead one to purchase what they do not need or go for what they cannot afford initially. If you are someone changing wardrobes and getting different styles of clothes every month, consider if it is actually necessary or just something you want. Your mindset is to save for the long-term or likewise channel the money into investing for a higher return.

Being surrounded by broke people: Something I have come to understand in life is that you can never find a rich man among the poor. They are always surrounded by people who have the same thinking, mindset and thoughts about how to make more money, invest in shares and bonds, and create more passive income. Being around these people tends to make them open to newer opportunities that would change their lives. If you are surrounded by poor money habit people, you will be influenced and this can rub you off of great opportunities. There is time to break free from such kinds of people, seek out friends or mentors who are happy to lead and guide you on the path to financial stability and can provide a positive influence to you.

In conclusion, embracing good money habits tends to add value to our lives more than the opposite, and this journey requires discipline, a learning mindset and having some strategic plans at hand. When we are able to understand and change our behaviours causing us to inculcate poor money habits, we would definitely break free from financial stagnation. By focusing on disciplining ourselves on spending, increasing our earning power, being financially literate, making savings our priority, cutting back on impulsive buying, looking out for positive influencers, diversifying our incomes, etc, we will be finding the path to financial freedom easier. Though this journey is challenging, it is a sacrifice we have to pay as the rewards are worth every step.

Thanks for your time on my blog.