People Who Make These 11 Life Choices Usually Stay Broke No Matter How Good Their Jobs Are
Having better financial habits relies on recognizing areas where you could improve.
Pormezz / Shutterstock An individual could have the best-paying job ever and make a considerable amount of money when they get their paycheck every two weeks, but their disposable income really depends on their financial habits. It's never about how much money you're bringing home, but how you spend and utilize that money. Certain habits and decisions that you make with your life can be the difference between having an abundance of money in your bank account versus struggling until you get paid again.
It can be things that you aren't thinking twice about that are doing you a disservice, but being able to recognize the patterns is always the first step to understanding what you need to do to take control of your financial future. It might be hard at first, especially if it's things you're used to doing and having, but you'll see in the long run that the benefits far outweigh anything else. Staying broke shouldn't be something you accept when you have the means to pull yourself out of financial instability and live a thriving and fulfilling life.
People who make these 11 life choices usually stay broke no matter how good their jobs are
1. Avoiding having financial conversations
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If you're someone who refuses to talk about money with anyone in your life, it could be one of the reasons why you have a hard time not being broke. Whether you avoid the topic with your significant other, your friends, family, and maybe even yourself, it means that you might be avoiding taking accountability for your actions.
"Without understanding the cultural messages that shape our attitudes toward wealth, debt, and spending, we risk making financial decisions based on narrow or incomplete perspectives. Just as we learn language, customs, and social norms from the culture around us, we also absorb messages about money," explained financial therapist Nathan Astle.
There was once a time when talking about money was considered such a taboo topic. Things like that were meant to be hush-hush, but times have changed, and being transparent about your finances with those around you helps to avoid the shame and discomfort. If you're not discussing money, it can be challenging to identify what you're doing wrong and the steps needed to rectify it.
2. Refusing to learn about money
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Data has revealed that Americans appear to feel the most comfortable with financial knowledge on borrowing, saving, and consuming, and the least confident around comprehending financial risk. Financial education in schools isn't quite extensive, which is why it's up to the individual to take the time to learn. Just as it's important to discuss money, learning about finances is equally important.
Not knowing how money works and the resources you need to avoid financial instability can truly keep someone broke. You don't need to go back to college and major in finance, but you should have control over your finances and the knowledge you need. Many people believe they can figure things out as they go along, and while that's true, being a. it allows you to anticipate and handle obstacles more effectivelbit ahead of the curve is alwaysy.
3. Spending to impress others
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According to a Bank of America survey, nearly half of Americans at least somewhat agree with the statement, "I am living paycheck to paycheck," as of the third quarter of 2024. This means that people should be taking more consideration when it comes to spending, including those who have good jobs. If you're someone who enjoys spending your money to impress others, that's the worst financial decision that you can make for yourself.
It shouldn't matter what others think of your lifestyle, as you're the one who has to live with the consequences of choosing to overspend for a certain image. The truth of the matter is, most people really aren't even paying attention. Everyone is always worried about themselves and their own lives, to even take a second glance at what someone is wearing or what car they're driving. Temporary approval shouldn't feel good if it's at the cost of your bank account.
4. Thinking you don't need to budget
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According to a 2023 NerdWallet poll, over 256 million Americans have some form of budgeting in their monthly planning. An estimated 83% of millennials stick to a monthly budget, compared to just 67% of boomers and 74% of Gen Xers. But being able to budget your money means caring about your financial future. A lot of people simply think budgeting is for people who are truly struggling, but the honest truth is that it can benefit every single person with a job who's making money.
The more money you make, especially, the more important it is to actually record how you're spending your money and how much you have left after paying all of the bills. Budgeting doesn't mean you need to restrict yourself or penny-pinch, but that you're just aware of where your money is going. By budgeting, you can identify areas where you may need to cut back due to their unnecessary nature.
5. Not saving for emergencies
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A study from Bankrate found that only 46% of U.S. adults have enough emergency savings to cover three months of expenses. Additionally, 30% of people have some emergency savings but not enough to cover three months’ expenses, and 24% have no emergency savings at all. Even if it's just a couple of dollars from your paycheck every two weeks, a little bit can definitely go a long way.
You never know what life may throw at you and what you'll need to pay at such short notice. If you're not prepared, unexpected expenses can quickly turn into debt. You don't want to be scrambling to pay something and have to turn to your checking account because you don't have enough, or haven't even started a savings account. Even a little bit, over time, will add up to give you the nice cushion you need, so you won't have to lie awake at night in a sweaty panic thinking about money.
6. Relying on credit cards for basic needs
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Using credit cards can help build up your credit and be a good thing for your finances, but if you're using it to cover basic living expenses, like groceries or even rent every month, it might be doing more harm than good. When you're always borrowing money from your credit card, it can end up being hard to pay that back. Around half of Americans carry credit card debt, with 46% of credit cardholders reporting having a credit card balance. About a quarter (23%) don’t think they’ll ever pay it off, according to Bankrate.
You might not think so, because these may seem like such insignificant charges at first, but they have a way of adding up quite quickly until suddenly, you're unable to pay your bill each month. Then suddenly, you find yourself drowning in credit card debt that could've been avoided rather easily.
7. Paying full price all the time
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Paying full price for things may not seem like a big deal if you're working a good job and receiving a nice paycheck, but you're actually doing yourself a huge disservice. By not actively seeking coupons, discounts, or sales, you're likely spending more money than necessary.
There's nothing wrong with wanting quality things, but there's a difference between splurging every now and again and swiping your card every single time you're shopping without actually looking at the price tag. You'd be surprised at how many deals are happening, and the number of discount stores where you can find good items that'll give you more bang for your buck.
8. Keeping unused subscriptions
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Subscription service charges can be quite sneaky if you're not on top of it. They're quite small charges, so you may not even notice at first that they're being automatically taken out of your account every month. But it's just a bit irresponsible when you know that you're not even using that subscription service. You haven't watched Hulu in over two months, and you've started listening to music on Apple Music instead of Spotify, despite having and paying for both.
Keeping track of your subscription services, and especially the ones that you aren't using, can help you save a few bucks in the long run. It's okay to let them go, and if you find yourself missing them, the beauty of it is that you can rejoin them at any point in the future.
9. Assuming investing is only for the rich
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A lot of people think they only need to start investing their money if they have copious amounts of money coming in regularly. They believe it's only for the extremely wealthy, but in reality, investing can be done by everyone and should be. By investing, you're allowing yourself to earn a little bit more money and even securing your financial future.
It takes a good amount of time to research, but once you do, you'll be surprised at how beneficial it really is. It just means you have to dedicate your time to learning the basics and stick with it, even when it might seem daunting at first. You don't realize how much you're missing out on by choosing not to invest your money, and starting early means building that money slowly but surely.
10. Spending bonuses immediately
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It's always exciting to receive a bonus at work, and at first, it can seem like all of this extra money that you should be spending immediately to treat yourself, but your first move should be about trying to save as much of it as you can. It's fine if you want to splurge, but it shouldn't be the entire check.
The bonus from work can help you get ahead of bills and the debt that you've been paying off in small chunks. It can be a way to boost your emergency fund or help cushion your savings account. Just like a regular check from work, you should be spending your bonus check in a smart manner instead of spending it all in one place.
11. Shopping to cure boredom
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We've all been there when it comes to leaning on retail therapy because we've had a bad day or are just feeling bored. While it's fine to do that every once in a while, making it a habit can be such a detriment to your finances. Buying something will only give you that quick sense of satisfaction, but it won't cure that boredom for very long, and suddenly, you find yourself hitting up the mall every single time you want to feel that rush again.
You're buying things you really don't need, and that can be quite dangerous for your bank account. You should really only be shopping for things that you know you need and will get use out of. On top of that, you should look into other things that can cure your boredom and things that don't require you to swipe your card.
Nia Tipton is a staff writer with a bachelor's degree in creative writing and journalism who covers news and lifestyle topics that focus on psychology, relationships, and the human experience.
