Are These 4 Habits Keeping You Broke?

You deserve to be financially secure. 

Sometimes, that’s really hard if you aren’t making enough money or if you live in a high cost of living area. When there are circumstances out of your control, there’s little you can do but try to wait it out for things to improve or look into government programs that can help.

In other cases, though, it’s not circumstances, but rather your habits that keep you from having enough money in your bank account to feel financially comfortable. In particular, here are four habits that could leave you broke. 

1. Impulse spending

Impulse spending can be a major financial mistake that leaves you with too little money. And it’s a common mistake. One Slickdeals study found that impulse spending averaged $314 monthly per person in the U.S. That’s almost $4,000 a year in wasted money that you can’t use to build your nest egg. And, these impulse purchases may not even be for items you really value, but instead could just be purchases made out of convenience. 

To curb your impulse spending, consider instituting a 24-hour rule. If you see something you want to buy that’s not on your shopping list, wait at least a day to purchase it. This will give you time to think about whether it’s actually something you want or just something you’re buying because it happens to be at hand. 

2. Paying yourself last

Paying yourself last is also a surefire way to end up broke. Basically, if you do this, you pay for all of your other expenses first before saving money toward retirement or other big goals.

The problem is, by the time it comes time to transfer money into your brokerage account or savings account, there’s a good chance there will be none left. Instead of putting your own security last, make a budget where you treat contributions to your savings account as a fixed expense. Treat saving as a must-pay bill and work your discretionary or fun spending around it.

Once you’ve figured out how much you can afford to save while still covering other necessities, set up automatic transfers of that amount of money into your savings or investment accounts so it can work for you. 

3. Carrying credit card debt 

Credit card debt is simply too expensive to be a reasonable option. The average interest rate on credit cards is 20.68% as of May 2023. If you owe $1,000 at that rate and you make a minimum payment of 2% of your balance, it would take you 219 months to repay what you owe and you’d make total payments of $3,543.97 — more than three times the original amount you borrowed. 

If you are tying up monthly income in credit card payments for 219 months and tripling the cost of all you charge, it’s inevitable you’ll feel like you’re broke forever. Instead, commit to paying off your card ASAP. You can consider refinancing using a personal loan or balance transfer to reduce the rate you’re paying on your debt and then make extra payments of as much as you can to free yourself from this burden and use your money for better things. 

4. Increasing your spending as your income goes up

Finally, if you increase your costs each time your income increases, you’ll never get ahead because you won’t be using your money to build wealth. You’ll just get used to your new standard of living and start to feel broke again when you can’t set cash aside for bigger goals. 

Instead, when you get a raise, put at least half the amount into savings. You won’t miss the money if you do this immediately when you get your salary bump, because you’ll never get used to having it in the first place.

Fortunately, all of these habits are easy to break. Start working on developing new, better approaches to money management today if you’re tired of being broke all the time. 

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee. 

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes. 

Read our free review