Top 10 Bad Money Habits

The Top 10 Bad Money Habits that are Keeping your Poor

It´s a question that drives you crazy.

How are other people so good with money when you´re always living paycheck to paycheck?

Well, the answer is in the habits you´ve formed without even realizing it.

But these bad habits are not who you are and you can break away from them!!

The feeling of failure associated with believing that other people find it easy to manage their money and you´re just a programmed spender is a false lie!

Even me, yes me, the person with the personal finance blog used to have some shocking money habits!

Oh man, when I think about some of the money mistakes I made, not just once but over and over again for years!!

But it´s never too late!

It wasn´t until about the age of 35 that I really found my money mojo and developed some kick ass money habits, and it has radically changed my life!!

So here´s the deal, no one was born with personal finance super powers.

Think about it.

You weren´t taught money management in school, or by your parents, in fact maybe you learned your bad money habits by modelling their behaviour!

You´re bad money habits aren´t written in the stars or your DNA and can be broken just as any other habit can. They are habits! not personality traits!

They don´t define who you are and this time next year you could be known in your group of friends as “the one who´s really good with money”.

Pretty cool right?

If you know you´re f-ing things up financially but feel like you just can´t break your bad money habits, start by recognizing they are nothing more than habits you have formed other time.

Great news! You´re doing the work to change them into awesome money habits that build wealth!

Let´s dig a little deeper...

There is a fear associated with trying to change a bad habit.

Do you worry that the hardship you feel when resisting your normal course of action will last forever?

Maybe you think, you´ll forever feel deprived and “in the struggle”.

Living with good money habits is just as easy and effortless as living with bad money habits, the only difficult part is the process of switching from one to the other.

A person who has saved 20% of their income for the last 30 years doesn´t struggle each month with this wonderful money habit, they don´t even give it a moment´s thought.

It´s just what they do, a habit.

Rest assured that while the transition from Money Moron to Money Rockstar might by a rocky road, you can make it to the other side.

Once your brain is re-set you´ll be one of those enviable people who gets told all the time “I wish I could be like you, you´re so good with money”.

On reading the list notice the first 3 are mindset changes!!

There is only one difference between you and rich people and it´s mindset.

The idea is to focus on changing your thoughts first and the behaviour will naturally follow.

So let´s jump in with the Top 10 bad money habits that are keeping you poor.

1. Your head is in the sand

It´s an unfair myth that an ostrich sticks it´s head in the sand because they´re scared. They do it to keep checking on their eggs, their future, they do what an adult ostrich has to do.

You´re not an ostrich and your head should be above ground, eyes and ears open, checking on your future.

Maybe you have the bank knocking on your door because of overdue credit card debt? Maybe you don´t track your expenses but kinda know that you´re spending more than you make? 

You can´t outrun bad finances and they WILL snowball into bigger problems.

Deep down you know it´s true.

STEP 1stop hiding from the issue, lift every rock, pull out every bill, log into every bank account and debt provider and take a good long stare at your finances.

How about making a promise with yourself that you will never ignore any potential bad money habits again?

No more dropping letters from the bank straight in the trash or ignoring that slight feeling of panic as the cashier swipes your credit card!

More favourite posts that can help you crush your finance goals:

2. You have a dream, not a plan

Aimless, bored spending is what happens when you´ve drifting without a structured plan.

Millionaires are motivated to organize their spending, saving and investing because they have very clear, measurable goals.

Knowing what the ultimate dream is and then breaking it down into specifics is a killer to bad money habits.

After that, tracking your progress is what you need to do to move onwards and upwards.

Generic goals, like “buy a house”, “quit my job” might not seem realistic enough to motivate you into action.

The more specific you are the easier it is to see what you need to do to make your dream a plan.

Let´s take a closer look...

We´ll pretend someone has this goal:

  • I want to leave my job in the city and freelance from home then move from my rental apartment to a purchased house, less than an hours drive from my parents.

How could we define more specifics? Get as detailed as possible, ask yourself:

  • What kind of freelance work am I looking for? Will I have a niche? What specific training am I missing to get the contracts I want?
  • How much mortgage debt am I willing to take on?
  • Leaving my corporate job means a period of less stability, am I willing to do this while I still have student debt or should I wait until it´s paid off?
  • If something were to happen so I couldn´t work what would my back up plan be? How much emergency fund do I need?
Once you can see clearly what you want it´s so much easier to break it down into a goal for each year and break that further down into actionable steps.
If a big life goal with financial and personal dreams is too overwhelming plan as far as you can see into the future.

It might be that all you currently dream off is getting free of your student debt or finding a job you love.

What´s important is to give it real thought and be specific.

It´s ok if you´re not sure if what you want today is what you´ll still want in the future.

Your life goals will change over time and you´ll need to constantly revisit and revise your plan to make sure you´re truely on the right path.

3. Your spending is not aligned with your values!!!

Oh boy! This is a big one!

If I had to pick just one item from this Top 10 it would be this.

I truly believe that focusing on what you do with money without addressing how you think about money will not create lasting change.

If you were to list every single purchase made in the last year would you feel pride or shame if it was made public?

Jeez! what a thought right?

It might make you cringe just thinking about this!

NEWS FLASH!: If your spending is not a true reflection of what you love and value in life it´s going to be harder to get the things you love and value in life!

Let´s say someone had drawn conclusions on my values based on my previous bad money habits. They would say “this girl loves TV and shopping more than anything”! 😳

How embarrassing! 

What about you? When you take the time to look back over your spending you might be shocked to realize your spending isn´t truly aligned to your values either.

Let´s look at some examples of how many people hemorrhage money just because they´ve never taken the time to define their values.

  • Impulse spending
  • Using shopping as entertainment
  • Thinking you have to meet friends over a meal or drinks
  • Driving when you could cycle or walk
  • Being lazy about cooking and ordering too much take out
  • Buying every new
  • Shopping to impress other people
  • Believe you are as good as the car you drive

So, every time you are about to spend money stop and think, “is this purchase aligned with my values”?

Imagine your spending habits as a reflection of your values to plug the money leaks long term.

4. You need boundaries (a budget)

Let´s be honest, anyone with a pulse and zero financial guidance would go bat shit crazy if they were given a million dollars.

The truth is, we´re not hard wired to manage money, we have to learn the skills and even the super rich need some help, heck most millionaires got to where they are because they set themselves boundaries with a budget.

Check out, this incredible study on millionaires that shows most millionaires are self-made ordinary people who used a budget to control their spending and kick to the curb bad money habits.

You know, the average American family spends $647 a month on groceries.

Whereas the average American millionaire spends just $412.

If they can do it, you can to!

To be honest, I HATE budgeting! The thought of hours spending hours assigning every dollar to a category and then checking my spending fills me with dread.

However, if you find the idea of classic budgeting appealing, go for it!

 Whatever gets you organized. There are tools and tools and more tools to help you get started.

But if you´re like me and recognize you need structure but prefer the most minimal approach the No Budget No Problem way is for you.

Let me explain, set a realistic amount for how much you can save each month and set that aside as soon as you get paid. Then live happily off the rest.

It sounds simple, and it is!

Most importantly, when your monthly spending money has run out, it´s run out, tough titties, there´s no dipping into other funds.


5. You´re carrying consumer debt

We all know that credit cards when used responsibly can help your financial situation by improving your credit score and making your bank manager go all gooey at the sight of you.

But if you just can´t control yourself with the cards it´s time to pull out the scissors!

The simple truth is, credit cards make things waaay too easy and the system is designed to trap you. As a result it makes you poor and the credit card company super rich.


Quite simply, getting into credit card debt is one of the most expensive bad money habits a person can make!

Only paying the minimum means the interest charges will compound, snowballing into larger and larger debt.

David Bach, author of The Automatic Millionaire explains that paying off a balance of $8,400 on a card charging 18% would cost you $20,615 in interest alone!!!

We´re sure you already know, if you can´t afford it in cash, you can´t afford it!

Nevertheless, if the purchase is aligned with your values you can take the time to save up and pay it in full.

The bottom line is, you need to always pay your credit card balance in full.

6. You´re living on the edge

Fact: You need an Emergency Fund!!!

Ever noticed how things have a tendency to go wrong in life?

It´s unavoidable, it´s simply a matter of when not if.

Guess what?

Your car is not going to ask you if it´s a good time to break down.

Moreover, relying on credit cards when unexpected expenses arise is only going to push you further to the edge of disaster.

No sweat!

If you´re guilty of this bad money habit here´s what to do.

Firstly, get your budget in place. Secondly, you should send your monthly savings to a separate bank account to build up your minimum 3 month fund.

Did you hear that bit? Separate bank account people! Ideally, a high-interest savings account.

Save yourself from yourself and DON´T TOUCH the Emergency Fund! 😜

7. You only have one source of income

Whether it´s The Joneses or The Kardashians these days it seems everyone is flaunting their wealth on social media, be it imaginary or not!

There´s nothing wrong with trying to keep up with The Kardashians as long as you´re inspired by their number of income streams and not their shopping habits!!

Did you know that according to the IRS most millionaires have 7 streams of income? 

Imagine how great it would feel knowing that if you were to lose your job you have a safety net of other income streams?

3 main areas of income are rental properties, stock market investments and business ventures.

While investing in property and stocks are fantastic corner stones to wealth building the easiest entry point to stack up your income streams is with Side Hustles.

Let´s take a look at some examples you could start today to kick this bad money habit:

  • Start a blog
  • Become a freelance writer
  • Sell your crafts on Etsy
  • Work as a virtual assistant
  • Create an online course or ebook
  • Offer a service, dog walking or house sitting
  • Rent your spare room on AirBnB
  • Become a weekend wedding photographer

8. You have zero retirement plan

Like it or not, we´re all going to get old one day and the sooner you start planning for your retirement the more of a kick ass oldie you´ll be.

A great place to start is taking advantage of free money offers from your employer´s tax advantaged savings account.

The kicker is, these plans are often not enough to comfortably fund the future you want.

So what are you going to do?

Well, you could build up a portfolio of investment properties so you´ll be able to live off the passive income.

Another option is to start investing outside of your employer plan (see the next point!) 

The choice is yours.

9. You´re not investing

Assuming you´ve crushed bad money habits 1 – 8 you´re now ready to move into investing.

Unfortunately too many people are intimidated by the thought of investing and think they need to wait until:

  • They make more money
  • They get married
  • Are further along in their career
  • Are a bit older

Believe or not the most successful investors are those who simply started young, automated their transfers then moved out the way and let compound interest do it´s thang.

This is the point where you plant your money tree and discover how money can make more money all on it´s own!!! 

10. You need to grow the gap

If you have done all of the above but still feel frustrated you need to grow the gap!

Err, what the heck is the gap?

The gap, quite simply, is the distance between what you earn and what you spend.

Basically, the smaller your gap, the longer it will take you to build wealth.

Conversely the more distance you manage to put between these two figures the faster and faster you´ll increase your Net Worth.

Simply right?

Most people find it easier to start by pushing down on what they spend. As awesome as this is, i´m sorry to tell you, there´s no frugalizing yourself to wealth.

As soon as you´ve pushed your spending into place and locked it down you need to push up your earnings. This could be in your day job, working toward a raise or considering a career shift if your current earning potential is limited.

Side hustles, flipping things on eBay, freelancing…anything that grows the gap, grows your wealth.

Net Worth Girl Bad Money Habits Keeping you Poor!

Final Thoughts

Of these Top 10 bad money habits I spent all of my 20s victim to at least 8 of them!

As soon as I started one by one breaking each habit my Net Worth started to grow like crazy! I was in the same job as before, the same home with the same friends. 

The only thing that changed was my mindset! 

The power is inside you to banish your bad money habits forever!

Leave a Comment

Your email address will not be published.

Scroll to Top