It has been said that if you give a poor man a million dollars, give him a few months and he will go back to being broke.
Clearly, if a poor man’s financial habits do not change, he will continue to mishandle his money.
In this article, we will study poor people’s bad habits that make their lives a constant financial struggle.
With the right financial education, everyone can break free from these and start growing their savings!
1. Procrastination (Putting Off for Tomorrow What Can Be Done Today)
Some call it laziness, but prioritizing things that matter least over things that matter most can definitely take a toll on your financial life.
How many times have you unconsciously been scrolling your social media accounts for hours, which is time that could have been spent scrolling freelancing jobs or investing in your own financial education?
Procrastinating will always result in lost time, energy, and opportunities to earn.
What to Do
- Make a list of things to do, put it in a schedule, then stick to it!
- Have a trusted family member or friend to remind you when you are already spending too much time doing nothing.
- Look for freelancing jobs to keep you busy and earn money. You can explore sites like Upwork and Fiverr to help you with this.
2. Engaging in Impulse Buying, Especially on Items You Don’t Need
Are you always looking forward to the next big sale at the mall or stashing up your online shopping cart and waiting for your next payday to check your items out?
You might argue that these are just small items and won’t hurt your pocket. Guess what? Small expenses are still expenses, even if they are on sale.
If you have the habit of impulse buying, you might be unaware that you are already spending hundreds of dollars even on these small items — money that should’ve gone to your savings or emergency fund.
Further, this habit can get you in trouble, especially if you are already borrowing money to pay for your purchases and are not able to pay for your monthly bills.
What to Do
- List down all your monthly expenses, then remove as many unnecessary items from the list.
- To avoid the temptation, uninstall online shopping apps from your device.
- If you must treat yourself every now and then, make use of apps that can earn you cash-backs when you shop on their online portal or on participating stores, like Rakuten and Dosh.
3. Not Addressing That There Is a Financial Problem
If you fail to accept that there is a problem with why you are struggling with money, then it is much more difficult to come up with a solution.
Ignoring the issue will mean that you’d rather spend your time going on with your daily routine and engaging in a lifestyle that drains all your money without you realizing it.
On the contrary, acknowledging that something is wrong with the way you handle money is always the first step toward achieving financial freedom.
What to Do
- Get educated! You can start with YouTube videos and free online courses that teach financial awareness. You can also try Coursera, where you can take courses from top universities in the country!
- List all your expenses to track where your money goes, then reassess your monthly budget and allocation.
- Write down your personal financial goals and what steps you would take to accomplish them.
4. Living in a Messy Surrounding
Can you actually think straight in a messy environment that is full of trash and clutter? I sure can’t!
When you finally declutter and clean your house, you will be surprised at how much it motivates you to stay organized, even financially.
During your decluttering, you might even find a lot of useful items that you don’t need anymore. You can even earn more from selling them on platforms like Etsy or Facebook Marketplace.
What to Do
- Dedicate and block off a few days, or even a week, to cleaning your room or your house.
- Organize your stuff in boxes and mark one of them for items that you can sell online.
5. Losing Hope That Things Will Get Better
Our greatest enemy in breaking free from our financial struggles is ourselves — not our environment, not our past, and definitely not the people around us.
It is easy to blame so many factors for our poverty. However, take note that being poor is one thing, but staying poor is another.
If you don’t want to stay poor, you need to do something about it now!
Stop wasting time blaming the world for why you don’t have money, and focus on what you need to do to break free from poverty.
What to Do
- Talk to people who are successful in life and get their best practices. It would be great if you could ask them to mentor you toward success.
- Read books and enroll in courses that will motivate you to achieve financial success. A great example of this is Rich Dad, Poor Dad by Robert Kiyosaki.
6. Failure to Manage Personal and Credit Card Debts
It is sad to know that many people start their careers very well and then get their first credit cards.
They get too excited to use these for their purchases until they realize soon enough that they are already in a pile of debt.
Having huge debts is not just difficult to deal with financially. But it also takes a toll on your mental, emotional, and physical health due to all the stress you have to deal with.
However, take note that there are also many success stories of people breaking free from this financial hurdle.
What to Do
- Negotiate! If these are people you owe money to, ask for easier payment terms.
- Do a balance transfer to your credit card with the lowest interest rate.
- Ask your credit card company for a payment arrangement that will allow you to pay your debt without all the interest and additional charges.
Note: Whatever you do, never borrow money to pay off another debt. This will just result in an unending cycle that will be difficult to get out of.
7. Being Contented With Trying to Survive
Sometimes, a person becomes so used to his current state of living that it is already difficult to convince the person to achieve more.
This is already more of a personal decision for each individual. However, if you are dreaming of getting out of poverty, then you have to stop being content with living a mediocre life.
Further, having just enough to get you past your daily lives is not going to cut it when an emergency strikes.
What to Do
- Associate with successful people and get ideas from them on how you can improve your way of living.
- Focus on getting a better-paying job and performing very well so you can eventually get a raise or even a promotion.
8. Uncontrollably Spending Money on Vices
Vices are like black holes. If uncontrolled, they have the tendency to sap so many of your good investments — health, relationships, and yes, money.
If you are already financially challenged, being addicted to vices such as alcohol, smoking, and gambling will just make matters worse for you and your family.
What to Do
- Get professional help and do it early.
- Talk to your family and friends who are genuinely concerned about you.
- Try new and healthy hobbies that may even earn you money in the process.
Pro Tip: Watch your diet! Although not technically a vice, eating uncontrollably can create a huge impact on your finances.
Imagine how much money is needed to treat diabetes, heart problems, and other diet-related illnesses.
9. Not Prioritizing Having an Emergency Fund
What happens if another pandemic spreads, a loved one is hospitalized and needs an operation, or a natural calamity strikes, and you do not have something set aside?
This is a scary thought for many families without an emergency fund because they tend to spend their money on instant gratification.
This will also leave you no choice but to get into another debt that you might not even have the means of paying back.
This is why an emergency fund that will last at least three months is necessary to protect you financially from unavoidable circumstances in life.
What to Do
- Allocate a percentage of your monthly earnings to your emergency fund.
- Create a separate account for your emergency fund versus your personal funds. This prevents you from touching the funds, except for emergencies.
- You can start with small amounts, then gradually increase as you have more income opportunities.
10. Engaging in Get-Rich-Quick Schemes
People who are poor sometimes can’t wait to get rich. They eventually fall into a lot of get-rich-quick schemes, which are usually scams.
These schemes intend to deceive people who are desperate for huge and easy earnings by asking for money to proceed with the business transaction.
Then, poof! You are blocked. They are gone. Your money is gone.
Always remember that if it is too good to be true, then it probably is. Most legit transactions follow a protocol that protects both parties involved and takes time.
What to Do
- Never engage in any transactions that require you to pay money in advance. Most legitimate transactions will never require this.
- Focus on securing jobs that you can get from legitimate sites and apps, such as LinkedIn, SimplyHired, and Glassdoor.
- Never give out any personal or credit card information.
Now that you are aware of the bad habits of poor people, as well as how to get rid of these, let us know if you have any more of their bad practices to share. Feel free to ask your questions, too!
