9 Habits that are Keeping You Poor
I was watching this video by an accountant on YouTube @nischa which I thought would be worth sharing on this site. Don’t just skim through what is written here, watch the video, and then watch more videos that nischa has made on her YouTube Channel. In this video below she lists nine habits that could be keeping you poor:
- Paying Yourself Last
- Bad Debt
- Not really knowing your income & expenses
- Expensive Hobbies
- Waiting too long to invest
- Not caring
Paying Yourself Last
Paying yourself last keeps you poor because it puts your own needs last. Instead of prioritizing your own needs and financial security, you are instead using the money from your income to pay for other expenses first. This leaves you with very little money for your own needs and financial security, leading to a cycle of poverty. This also means that you are not able to make investments for your future or save money for a rainy day. When you prioritize your own needs and financial security first, you can plan for the future and be financially secure.You are really wanting to ensure that you pay yourself first and the minimum should be 10%.
Being Comfortable with Bad Debt
Being comfortable with bad debt keeps you poor because it leads to a cycle of debt that is difficult to break. When people rely on bad debt, such as credit cards, payday loans, and other forms of high-interest financing, they become accustomed to having easy access to money and are often unable to pay off the debt in full each month. This means they accrue interest and the debt continues to grow, resulting in more debt and higher interest rates. This cycle of debt keeps people in a state of poverty, as they are unable to save money or invest it, and instead are stuck with mounting debt that is difficult to pay off.
Not Having a Buffer or Savings
Not having enough savings for 3 – 6 months can be extremely detrimental to your financial stability. When you don’t have savings, you are unable to cover unexpected expenses such as medical bills, car repairs, and home repairs. You also can’t take advantage of opportunities that come your way, such as starting a business or taking a job with greater pay. Without savings, you are also more vulnerable to financial hardships such as job loss, illness, or natural disasters, which can leave you with even less money and more debt. Additionally, lacking savings can prevent you from being able to take advantage of technological advancements and investments that could result in greater wealth. Therefore, not having enough savings for 3 – 6 months can cause you to remain poor.
Not Knowing Your Actual Income and Expenditure
Not knowing your actual income and expenditure can keep you poor because it makes it difficult to budget and plan for your financial future. Without a clear understanding of your income and expenses, it can be difficult to determine how much you can save each month or how much debt you have. Additionally, without knowing your income and expenses, you may be overspending and not leaving enough money for necessities and savings. This can lead to financial hardship and potential debt, further contributing to poverty. Ultimately, having a clear understanding of your income and expenditure is essential for establishing and maintaining financial stability.
Having expensive hobbies can keep you poor if you don’t manage your finances responsibly. Expensive hobbies, such as travelling, collecting, and participating in sports activities, can quickly drain your bank account if you don’t keep track of your spending. These activities can be quite expensive, so it is important to budget your money carefully and only purchase or participate when you can afford it. It is also important to remember that having expensive hobbies does not always guarantee happiness; instead, it can lead to feelings of financial strain and guilt. If you find yourself constantly spending money on expensive hobbies, it is important to take a step back and reevaluate your budget to ensure you are still able to afford your lifestyle.
Not Focusing on Saving
Not focusing on saving money can keep you poor because you need to have an emergency fund and savings to help you in the future. Not saving money means you are living pay-check to pay-check, and you are not planning ahead. Without savings, you will not be able to pay for larger expenses like a car repair, medical bills, or even a down payment on a house. Additionally, without a savings account, you will not be able to invest in stocks, bonds, and mutual funds that can help you create a retirement fund or provide a steady stream of income. Finally, saving money is essential for creating financial security, as you will have a cushion to fall back on in the event of a financial emergency.
Paying too Much in Taxes
Paying too much in taxes keeps you poor by taking away a portion of your income that you could otherwise use for savings or investment. When you pay too much in taxes, you are not able to grow and build your wealth, as you are unable to keep the money you have earned. The less money you have to invest, the less opportunity you have to make more money, which can further prevent you from achieving financial security. Additionally, when you pay too much in taxes, you have less money available to spend on necessities, such as food and housing, which can further contribute to financial instability. Ultimately, paying too much in taxes can keep you from being able to build wealth and become financially secure.
Waiting Too Long to Invest
Waiting too long to invest can be detrimental to your financial future. When you wait to invest, you are essentially missing out on the potential to earn returns on your investments, which can add up over time. As time passes, inflation can erode the value of your money, making it worth less than it would be if you had invested it. Additionally, if you wait to invest until you are older, you may not have the same amount of time to realise the full benefits of compounding interest. By waiting too long to invest, you may be missing out on the opportunity to create a secure financial future for yourself.
Not caring keeps you poor as it prevents you from taking the necessary steps to better your life. When you don’t care, you don’t take action or make plans to improve your financial situation. You may choose to stay in a low-paying job because it’s comfortable, or you may not take steps to reduce your expenses. Not caring also prevents you from taking risks that could lead to more opportunities. Without taking risks and challenging yourself, you will likely remain stuck in a financial rut. Finally, not caring can lead to bad decisions that could put you in more financial trouble. When you don’t care, you are more likely to make decisions without thinking of the long-term consequences. Ultimately, not caring will only keep you poor.
This is only one video of a whole raft of videos that you may find useful to help you to get the financial freedom that you are seeking. So why not subscribe to @nischa on YouTube.