Learn which bad money habits that might keeping your broke and ways to break them.
Ever wonder why you never seem to get ahead financially, no matter how much you earn?
The truth: You have bad money habits.
They can silently drain your money and keep you stuck in a cycle of financial struggle — even if you make decent money (note: knowing how to make money and how to save money is two seperate skills).
If you want to build a strong financial future, it’s not just about earning more; it’s about being smarter with what you already have. Recognizing these habits is the first step toward change.
Let’s dive into the habits that might be keeping you broke and what you can do to break free.
13 Bad Money Habits
1. Living paycheck to paycheck
If your income disappears as soon as it hits your account, you’re not alone.
Many people get stuck in this cycle, where money comes in and immediately goes out to cover bills, takeout, and other spending that often isn’t tracked.
Break the cycle by tracking your expenses, creating a simple budget, and making saving a non-negotiable—even if it’s just a small amount to start.
2. Not having a budget
A budge is a must-have for everyone (regardless of how much money you have).
It’s a financial roadmap that helps you control where your money goes, instead of wondering where it went at the end of the month.
Without one, it’s easy to overspend and ignore the bigger picture.
A simple spreadsheet or a budgeting app can help you answer key questions like:
- Where is most of your money going?
- Do you have an emergency fund?
- Are you saving toward any goals?
- How much are you spending each month?
If you can’t answer those yet, it’s time to start budgeting.
3. Relying on credit cards for all your purchases
Credit cards make spending easy—way too easy.
Tap, swipe, click… and it’s done.
But that convenience often disconnects us from what we’re actually spending.
Before you know it, you’re staring at a bill that makes you wince.
Using credit has its benefits but if you’re not mindful of what you spend it can lead to debt that snowballs fast. Use credit cards strategically and treat them like cash—only spend what you can pay off in full.
Alternatively, use cash to pay, this helps to keep track and limit you to only make purchases that’s within your means.
4. Not having an emergency savings
Save for a rainy day. — Aesop
Life happens in the most unexpected ways — car repairs, vet visits, medical bills, job loss, etc.
Without an emergency fund, those moments of unexpected expenses can snowball into credit card debt or loans.
If you don’t have an emergency fund, start one today.
It doesn’t have to be alot of money, even $10 a week adds up over time.
Aim for 3 to 6 months’ worth of basic living expenses, but don’t let that number overwhelm you.
What matters is that you start.
5. Impulse spending
We’ve all been there—scrolling late at night and suddenly “adding to cart.”
Impulse buys might feel good in the moment, but they drain away your finances.
So think before you buy.
Here’s a good habit to adopt: The 24-hour rule.
If you see something you want, wait for 24 hours. Chances are, the urge will pass (and your wallet will thank you) but if you’re still thinking about it then it you could consider making the purchase.
Lastly, always keep the receipt in case you change your mind within the shop’s return policy.
6. Keeping up with the joneses
It’s tempting to match the lifestyle of friends, influencers, or coworkers—but their spending doesn’t always reflect their actual financial situation.
You don’t know if they’re in debt, living paycheck to paycheck, or getting help behind the scenes.
Chasing a lifestyle that doesn’t match your financial situation can often lead to overspending, debt and financial anxiety.
If your goal is to change or upgrade your lifestyle, start by taking small steps, budget your desired goal and always spend within your means.
7. Avoiding financial education
The best investment you can make is on yourself.
Learn to become financially literate. You can do this through books, online videos, podcasts or even take local community financial course.
The more you learn, the more empowered you become at making financial decisions that are best for you and your future.
8. Paying only the minimum on debt
Creditors love this because they can charge you interest on what you haven’t paid.
In other words, it means more money out of your pocket, and your debt will linger longer than it should.
So avoid making minimum payments and do your best to pay everything in full.
If paying in full is not possible, try to pay more than the minimum or as much as you can to prevent debt from snowballing.
9. Not tracking your expenses
If you don’t know where your money is going, it’s impossible to manage it well.
It’s like trying to lose weight without knowing what you’re eating.
Tracking your expenses helps you spot leaks in your budget and gives you control over your cash flow.
There are plenty of ways to track your expenses—apps, a notebook, or a simple spreadsheet—pick one that works best for you.
10. Saving your money regular savings account
If your money is just sitting in a regular savings account, you’re missing out on compound growth.
Saving money is a good way to accumulate more cash but it won’t build long-term wealth.
Learn how to invest, even with small amounts. Whether it’s through retirement accounts, index funds, or the stock market, the earlier you start, the better.
11. Overspending on subscriptions
It’s easy to forget what you’re signed up for. $5 here, $10 there—subscriptions adds up fast.
So it’s important to regularly review and cancel services you don’t use.
Take 5-10 minutes a month to review your subscription list, and cancel anything that you haven’t used in a while.
While you’re reviewing, also take some time to look at your email subscriptions, and unsubscribe anything that you don’t read or follow. It’s a great way to prevent yourself from impulse purchases (most subscriptions are marketings emails designed to lure customers to buy their products).
12. Not negotiating bills
Did you know many companies are open to lowering your bills if you just ask?
They don’t publicly promote this but you can negotiate lower rates on your cable, internet, insurance, and other recurring bills, and even get certain fees waived.
So take action and call your providers today to learn more about their discounts, loyalty offers, or promotions.
You might save hundreds a year just by having a quick five-minute conversation.
13. Relying on one source of income
We live in an uncertain economy, and having a single income stream can be risky.
Consider side hustles, freelancing, or passive income sources to increase financial security and help you reach your financial goals faster.
Here are some other income sources to consider:
- Blogging (Medium, Blogspot, Substack)
- Online videos (YouTube, TikTok, Instagram)
- Selling second hand items (Facebook Marketplace, Ebay, Depop)
- Tutoring
- Dog walking
- Freelancing (Fiverr, Upwork)
- Selling art or craft online (Etsy)
How To Break Bad Money Habits
Financial freedom starts with small, consistent habits that build over time.
Start by identifying just one habit above that resonates with you, and take one small step to change it.
You don’t need to be perfect. You just need to be intentional.
Here are 9 steps to help you fix and break those bad money habits that you keeping you broke.
1. Recognize Your Problem Areas
Awareness is the first step towards change. Be honest with yourself and look at which bad money habits are holding you back.
2. Create a Budget
Plan your income, expenses, and savings. The more you know about your money, the more control you have over it. The benefit of a budget is that it gives you clarity and direction, helping you make decisions that align with your goals (think of it as a permission slip to spend wisely).
3. Track Every Dollar
Track all your spending, even if you only spent a dollar. Whatever method you choose to use, knowing where your money goes gives you the power to change it. You might be surprised by the small expenses that adds quicker than the big ones.
4. Build an Emergency Fund
Start small and gradually increase your savings. Even $5 a week adds up over time. Having a buffer brings peace of mind and keeps you from falling into debt when life gets messy.
5. Pay Down Debt Aggressively
Prioritize high-interest debt to reduce financial stress. The faster you eliminate debt, the more money you free up for things that actually matter. Every extra dollar you put toward debt is a win.
6. Learn About Money
Become financially literate. Read books, follow financial experts, and stay informed. The more you understand, the more confident you’ll feel making decisions with your money. Financial literacy is a lifelong skill and investment worth having.
7. Set Financial Goals
Having clear goals keeps you motivated and accountable. This could be saving for a trip, a new home, or retirement — a financial goal give your money purpose. Make your goal as specific as possible and track your progress regularly.
8. Surround Yourself with Financially Savvy People
You are the sum of your surrounding. Hang out with people who are responsible spenders, they can influence you with better financial habits. Also, conversations about money become more empowering when you’re learning from people who manage it well. It’s easier to grow when you’re not doing it alone.
9. Create Additional Income Streams
Consider freelancing, investing, or side hustles to grow your income. Earning more can fast-track your financial goals, especially when combined with smarter spending. Don’t underestimate the power of a little extra cash flow.
Poor Money Habit = Poor Bank Account
You’re not poor, it’s your bad money habits that are making you poor.
Breaking up with those bad money habits isn’t going to be easy, but it’s necessary for financial success.
Start today — make small changes, take control of your finances and build a secure future.
Your future self will thank you.
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