Finance

Do Away With These 5 Habits Or Forget About Ever Getting Rich

There are always countless human desires. We always crave for a lot of good or bad stuff, but hurry to quench our appetite as soon as we can afford it. For the many billions of people on the planet earth, this seems like a social norm.

Humans tend to strive more to satisfy their wants rather than fulfilling the essential needs that life truly depends on. We work so hard not just to earn a living, but to step up to the next level of comfort and luxury.

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This mindset towards money may put a short-term smile on our faces when we have the things we so desire, but the reality sets in as soon as we realise that there is still something out there that we cannot afford. Worse still, it’s so depressing to realize that after spending so much money, we can barely afford to pay for the things that really matter.

Have you ever stopped to find out why you’re always broke? Where all your money is constantly going to? And why your bank account goes red in about two weeks after earning your monthly paycheck?

If you realise that you’re deep in this kind of situation and can’t figure out exactly what’s going on with your finances, here are 5 habits that may be keeping you poor even with a good income:

1). Not Keeping Track Of Your Spendings

Spending without paying attention to the things they spend on is what keeps a lot of people’s pockets empty. This is because they spend so much money on a wide variety of really small unimportant things. Spending on the small stuffs unconsciously eats deep into their finances overtime, as they are largely unnoticeable.

In order to keep yourself from going broke and for you to have enough saved for the rainy day, it is crucial that you begin to keep track of where and how your money is spent.

2). Mistaking Your Wants With Your Needs

Mistaking a ‘want’ for a ‘need’ is another reason why people stay broke and poor. They go for what they want instead of buying what they need and end up with much less to save in the process.

For instance, buying a $20,000 car is a no-brainer if all you have in the bank is $30,000. Your rationale to purchase a car should be because you need a car, which might cost no more than $8000. But if you feel impulsed to put forward your entire $30,000 just to meet the need of a car, then it’s no longer ‘fulfilling a need’ but satisfying your ego.

Spending to fulfill a want rather than a need also leaves the most important of their basic needs untended. You can thus satisfy the need to own a vehicle and still have enough money in the bank to meet other important needs.

3). Always Buying The Next Digital Gadget

Once or twice every year, your favorite mobile phone manufacturer or gadget provider launches a brand new version of your existing device with amazing new features. Automobile companies do the same annually, with their newer versions looking more impressive than the previous ones. These annual innovations are intended to entice customers to keep up with the trend. And its costing you much more than you can imagine.

If you have formed a habit of spending on gadgets, appliances or vehicles you can barely afford just to keep up with the trend, it will remain difficult to break out of your social class.

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4). Weak or no budgeting

While carefully tracking your expenditures is a great step to ensure that you don’t go bankrupt, not wrapping your entire expenditure around a budget from the beginning can cause you to lose much more money than you might have saved. Budgeting your daily, monthly or weekly expenses should be the first on the scale. Living without a budget is like travelling across a country without a roadmap. Without a budget you have no idea how much you might have saved.

Before you start cutting down expenses, set a budget first and do all you can to adhere to it. By doing so, you are certain that a reckless spending spree would always be confined to a cash limit that you set for yourself.

5). Increasing Your Expenditure As Your Income Increases

When most people start earning a higher income, they usually move into a better house, buy a nicer car, buy more expensive clothing, take a lot of holidays, and enrole their kids in more expensive schools, among others. While increasing your living standards as your income increases is not a bad thing to do, blowing them out of proportion may leave you with nothing to fall back on when the rain comes pouring.

If you’re going to break out of the rat race and get on the fast track one day, you’d have to build a better culture of saving and investing. This implies raising your living standards by just one fragment and having to set aside more as your income increases.

Conclusively

Financial success is not exclusive to those who come from well-to-do backgrounds. This is obvious looking at the list of financially successful individuals. Chris Kirubi, Jalang’o, Churchill and many others who were born with no silver spoon, but with the right discipline, they attained the height of financial greatness.

According to Bill Gates, “If you are born poor, it’s not your mistake. But if you die poor, it’s your mistake.”

You should learn to cultivate prudent financial habits If you really want to break out of that poverty circus. The ball is in your court.

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