Imagine if you didn't need to make millions a year to become wealthy. There is a stigma attached to the low and middle class because they do not "make enough" to become wealthy. That stigma is not valid.

Sometimes it's the ones who do not make enough who become wealthy due to common sense money habits. On the other hand, the most influential person making millions a year can be broke or almost bankrupt due to poor money habits.

In this video, we will go over seven lousy money habits that keep people poor. Bad money habits not only applies to the ones making minimum wage but also the individuals making millions a year. People scratch their heads at months end when they look at their bank account, asking themselves, "where the heck did my money go?"

Imagine life with a positive balance in your bank account. Stress and worry would be reduced significantly. You could save or invest the free cash flow left over.

With that being said, let's get into the seven money habits that will keep you broke.

1. Focusing Only on the Present

Living in the moment can be great for mental health reasons. For example, if you are always worrying, then you may be fixated on the future. Being mindful in the moment can be great to ease your thoughts.

However, when it comes to money, most people do not think about the opportunity cost. Let's say you impulsively go out one night and spend $60 on a meal. Then the next night, you go out, spending another $40 on shots of tequila.

If you took that $100 total as your initial deposit and contributed an extra $200 a month at a 12% rate of interest, in five years, you would have $16,680!

Think of every purchase, even if it's a Walmart purchase, like the scenario above. You will start to realize that making unnecessary purchases are hard since there is no future value-added.

There must always be a balance between the present and the future. If you only think in future terms and do not enjoy the present, you will live a miserable life. The objective is to spend and save on the right things.

Looking out for the future is a sure-fire way to become wealthy. Instant gratification will slowly eat at you until there is nothing left.

Embrace the savings mindset and watch your wealth increase tenfold.

2. You Spend Like You Are Rich (Convenience vs. Savings)

Spending like you are rich is a classic example of a poor money habit that will run you into the ground.

While growing up, my mother and father made a stable income, and we were fortunate enough to never worry about money. The number one lesson I learned from both my parents is that they never spent more than they could afford.

We rarely ate out, spent little on non-essentials, and lived a frugal lifestyle. My parents were frugal on EVERYTHING!

It's one of the greatest lessons I learned when growing up. My parents become wealthy by living within their means and being frugal.

You do not have to spend like you are rich. If you want to become wealthy, buy groceries, and cook your meals in bulk rather than eating takeout for each meal. This is an example of convenience versus savings.

The reality is that broke people spend vast amounts on large purchases and eat out all the time when they can't afford the purchases.

It's crucial to spend like you are poor until you make a significant income. For now, focus on savings rather than convenience until your time becomes more valuable.

3. Expensive Restaurants and Drinks

Going out with friends or your significant other is always a fun time. However, going out to expensive restaurants and ordering many drinks is another poor money habit that doesn't really add to your "happiness" level as much as you think.

If you are continually eating at five-star restaurants when the bill comes to $200, you are setting yourself up for failure. It is absolutely okay to do this once in a while, don't get me wrong. But I really do think excessive fancy outings like that put you in a much worse financial situation.

People immediately celebrate that big promotion or goal achievement by going out to fancy restaurants or clubs. However, you may want to celebrate by cooking yourself a fabulous meal at home with a simple glass of wine, saving you tons of money.

4. Investing Procrastination

Time is your most valuable commodity. Most people wait too long to start investing and letting their money work for them.

Delaying your investment in your portfolio one year from now is massive. Compound interest is a powerful concept that must be understood if you want to become wealthy. It's simple and easy to learn, and there are lots of free resources to do so on the internet.

Fear can also cloud your mind. Knowledge is power if you apply it correctly in the investment world. Trust me, applying investment knowledge is easy to use. Once you learn about the history and mechanics of investing, you will see how necessary it is to create wealth.

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5. Lifestyle Expansion

Once your income begins to rise, you will start to spend more. A raise at your current job could result in a lifestyle increase, which will make it harder to get out of debt or save for retirement.

Common sense says if you are spending all that extra money you are making, it's nearly impossible to get ahead. It doesn't matter exactly how much income you generate.

When your lifestyle is inflated, it causes you to live paycheck to paycheck, stay in debt, and have little free cash flow left over.

Instead, it would be best if you tried not to keep up with the Joneses. You should also not take on new debt that you can afford. These two strategies will help you view your money habits from a different perspective.

6. Neglecting to Track Budget & Expenses

Keeping a budget is crucial if you want to live a comfortable living. Also, tracking monthly expenses and planning for the months ahead will set you up for success.

However, many people will not sit down and create a monthly budget or expense tracker. Either they are too lazy or make some other excuse.

It's easy and straightforward to set up a budget. Many apps, such as Mint, are free to use and categorize every transaction and income source. You can also use Google Sheets, which provides a free budgeting template.

7. Not Implementing the 5 Day Rule

The five-day rule states that you should wait five days before spending money on that product or service.

Think to yourself, "what value does this product or service bring to my life?" "Will I benefit from it, or is this an impulsive buy?"

You want to think BEFORE you act so you can avoid emotional spending. There is a fundamental psychological aspect behind the five-day rule. Spending money on products and services without thinking can leave a dent in your credit card and bank statement.

Before purchasing:

1. Write down the product or service you wish to buy.
2. Critically think about whether or not it adds value to your life.
3. Write the questions along with answers down on a piece of paper.
4. In five days, come back to the written down statement you made.

In five days, you might have avoided the purchase and saved yourself a ton of money!

Wrap Up

I hope you found this article useful. These are habits everyone should try and overcome. Prioritizing your financial situation and creating wealth is critical to a better lifestyle.

Putting a halt to these everyday habits will help you break free from the middle-class lifestyle and join the upper-middle-class net worth bracket.

Stopping these habits is hard and uncomfortable, but worth it in the end!

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Wishing you all a financially successful life,

Charlie