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9 Bad Financial Habits that Keep You Broke

This blog post is perfect for those of you who need to identify bad financial habits that keep you broke.

Nobody wants to be broke. Believe me I know the feeling.

Being broke means less money for eating out with friends and family, vacations, and doing all of the fun things you like to do. Being too broke is a risk factor for bankruptcy.

Now yes, there are a lot of things you can do without money.

But being broke is stressful and in general, everything else that you do is going to be a little less fun if you’re truly broke.

Although I have a six-figure income now, to this day I still have times when I feel broke.

Albeit I don’t feel broke when I am budgeting and following my personal financial plan.

Being broke is not the same thing as being poor.

But feeling broke is a sensation that I do not want to ever experience again. Hence my motivation to identify bad financials habits that keep you broke and write this blog post.

If you’re wanting to start investing for financial freedom, you will need to get away from feeling broke and leading a broke lifestyle too.

If you don’t, you will always think “I don’t have enough money to invest.”

But I’m here to tell you, two things. First, you don’t need a lot of money to successfully invest. Second, as long as you think you’re broke, you’ll think you don’t have enough money to invest.”

So what does that mean…well it means you need to get away from the financial habits that keep you broke. 

You have to identify these bad financial habits that are hurting you.

Let’s talk a little about 7 bad financial habits that keep you broke.

Identifying these bad financial habits will help you develop a strong powerful financial mindset where you are in control of your money and you do not behave like a broke person with poor financial habits.

You don’t budget (on a regular basis)

Yep, I know you hear this one all the time. But that’s how important it is. 

The worst of the financial habits that keeps you broke is not budgeting.

You have to have a budget. Even if it is a no budget, budget…you have a budget.

So just go ahead and check out these 3 simple budgets to choose from to help you get started. I wrote this article to identify my favorite types of budgets to include a list of pros and cons.

If you want a few more options check out this post by Eat Money on a few other types of budgets. While there are some budgets where you balance everything like the most senior level accountant or a diligent bookkeeper, there are other budgets where you only have to look at them once and when you have changes in income/expenses.

Types of budgets

  • Every dollar (zero-sum) budget
  • 50/30/20 budget
  • 80/20 budget
  • Envelope system
  • The ceiling budget

Check out this blog on the types of budgets and just get started with one.

Budgeting gives you control over your money. You have to know where your money is going, in order to not feel broke.

If you are ahead of the curve and know that you cannot afford to do something, you won’t feel broke. 

You will feel empowered to either cut costs in one area or increase your income in another.

Of course, I always recommend increasing income. I personally look forward to the days when my blog becomes profitable. 

Providing people with a solution to their problems, is ultimately the best job you could have. 

I started this blog following a free 5 day course from Create and Go. I would highly encourage anyone looking to make some extra money check it out. This is not an affiliate link, it is my genuine opinion of a great free course to start blogging.

Ways to make more money include

  • Start a blog (my personal favorite)
  • Become a Proofreader
  • Help others with tutoring
  • Teach a language online
  • Fill out surveys
  • Sell t-shirts online
  • Become an event planner
  • Become a freelance writer
  • Become a social media expert 
  • Become a virtual assistant
  • Become a social media manager (facebook ads, pinterest, instagram)
  • Design graphics 
  • Develop and teach an online course
  • Edit videos
  • Become a website designer
  • Sell crafts or digital products on ETSY or Amazon

The list goes on and on.  There are so many things you can do to maximize your skills to make extra money. Whie all of these things may take time to start seeing regular income, there is no better time than today to start.

You like to buy stuff instead of invest

If you had invested $200 in Apple in 2001 at $0.46 a share instead of buying an IPOD, you would have more than $450,000 worth of Appel stock today.  A $200 investment in 2001 would have bought you 434 shares that turned into 868 shares in 2005 and 3,472 shares in 2020 due to stock spits. 3,472 shares at the current price $130.21 (5/9/21) would be worth $452,089.12.  

Now imagine if you invested a few times a year in wonderful companies you are already supporting instead of buying something that you probably already have.

Prioritizing investing in your budget is guaranteed to make sure that you are investing more than you are buying.

If you are someone who is not investing, you will continue to feel broke for most of your life.

Investing puts your money to work so that you don’t have to. A day invested is buying a day of freedom.

Invest early. Invest often.

You are always keeping up with the Joneses

If you have the latest cell phone, computer, shoes, purse, chances are you are always keeping up with the Joneses but you are pretty broke. 

Take an inventory of the things that you have only because you saw someone else with it.

How often do you run out to buy something because you see someone else has it? 

Sure keeping up with the Joneses makes you feel good for the moment. But that’s just it, it only lasts for the moment.

Instead of keeping up with the Joneses, maybe you could try bringing vintage items back in style.

Learn to take care of your things and only have things that mean something to you could help.

You may find that you don’t even want things.

Nothing is worse than buying something and forgetting you bought it.

Well maybe it’s worse to buy something, never use it, and never find it again.

Ultimately keeping up with the Joneses doesn’t just keep you broke, it creates a lot of anxiety and perhaps some unrealistic expectations.

Buying things you know you cannot afford doesn’t make you feel good or make you happy.  It makes you feel crazy like you are out of control.

You spend your raises

Ahhh don’t we all love getting raises. Part of the reason we love getting a raise, is because we need more money as inflation takes over the world a little more every year. 

But what if you could identify ways to live within your budget, year after year and put that money away. 

Not everything is more expensive every year. 

As you begin using budgets, you will be able to identify the areas that are costing you more every year and the areas where you could cut expenses and begin to save money

Spending more, just because you got a raise is called lifestyle inflation. It’s a horrible cycle that no one can out earn. Just as you cannot outearn bad financial habits.

financial habits that keep you broke
financial habits that keep you broke

The only way to break a bad cycle is to do just that…break it. No matter where you are in the cycle. Now is the time to break it.

We never have enough. We always want more.

No raise is ever enough. You will always find something else that you “want” or “need.”

A no spend challenge is sure to help. You could focus on a no spend weekend, no spend week, or no spend month. Just get started making adjustments in your money habits and your mindset.

You probably don’t need or even want most of the things you have.

You don’t have an emergency fund

It’s easy to feel broke if you don’t have money to pay for emergencies. Things are going to happen and being prepared to cover costs will go a long ways in making you feel a little less broke.

An emergency fund is easy to set up but needs to be kept separate from your every day checking account and your normal savings account.

The emergency fund should only be used for emergencies and once you reach your goal for the fund, you do not have keep putting money in it.

You make money decisions with your emotions

I get it. It’s hard to ignore your emotions and think with your brain. 

But I promise it is worth it.

I want you to take a moment and think about the money decision you have made because you were emotional.

Have you ever bought a pair of shoe or a purse because you were upset?

Have you ever went shopping because you told yourself that “you deserve it.”

This is emotional spending.

The psychology of money is a real concept.

As Morgan Housel wrote in The Psychology of Money, “financial success is not a hard science. It’s a soft skill, where how you behave is more important than what you know.” 

Take a moment to check out this video by The Swedish Investor.  

The Swedish Investor

Many people are eager to buy something that they think will make them feel good.

They may also think irrationally and sell investments at the slightest hint of a downward turn.

It’s actually quite ironic but it makes sense. We tend to place more emphasis on avoiding negative feelings than enjoying positive ones.

I recommend taking some time to get to know your money personality and recognize when your emotions are making decisions.

You don’t have a personal finance plan

Sure you may say, I want to be reach and I want to retire by age 60.

But you don’t have a SMART (Specific, measurable, attainable, relevant, time-specific) goals and a SMART strategy to get there.

Think about it for a minute. How many things have you been successful at when you didn’t have a plan?

Were you able to figure out what to do at work without a checklist or some type of orientation guide? For most jobs, probably not.

We need a plan and a strategy for most things that we want to do.

Look at all of the world’s most successful businesses. They all have a plan and a strategy to reach that plan. And what’s better than that, if they’re a public company, they tell the world their plan.

Companies set goals. It really shouldn’t be any different for you and your business.

If you need help to create your personal finance plan, check out my free budgeting tool which has a few questions to get you started. From there you can determine what you will need to do to reach those goals.

You don’t talk about money, finances, and goals with other people

People with money aren’t scared or embarrassed to talk about money. So why should you be?

I love being able to talk about money with my friends and family. We use this time as an opportunity to help each other brainstorm about ways to make more money, companies to invest in, and daydream about future vacations.

When your friends and family know your money goals, they will be more helpful to you actually reaching them. They won’t make you feel bad when you have to skip eating out at the end of the money because you spent all of your eating out budget last weekend. They will be encouraging when you say that you have to research a new company to see if it is an investment opportunity.

It’s a totally different way of thinking. It’s really the rich way of thinking.

These types of conversations are not just for people with money. We have to shift away from being ashamed to talk about money to putting those conversations at the center of our relationships.

Affirm it today. Let the world know. You are going to be the world’s next millionaire!

Lastly, you are not striving to learn something every day

Taking about financial habits that keep you broke has to end with learning. Learning is the most important thing you can do for yourself. If you’re not learning, you’re not growing.

It honestly doesn’t matter what you learn, but you should be learning something every day. It really does make a difference.

I love reading 10 minutes a day. Sometimes the 10 minutes turns into 30 minutes or more. And I always feel so empowered when I am done.

The world offers so much to learn and each moment that passes is a moment that we cannot get back.

Take advantage of the opportunity to learn now. You deserve it.

I recommend you look for an online course in something that interests you, read a book, or join a group of like minded people for stimulating conversation.

Most people are not learning everyday. Imagine how unique you will be as you are!


You have learned about 9 bad financial habits that keep you broke. Take time to reflect on your behaviors to see which habits you can start working on today. Comment below on your worst financial habit and how you are overcoming it.

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Theresa is a personal finance blogger. She writes content for busy professional women to take control of their money and investments. She enjoys reading, traveling, cooking, and writing. Her work has been featured on GoBanking Rates, Your Money Geek, Savoteur, the Corporate Quitter, Thirty Eight Investing, and more.