Feeling like your bank account is always empty? It’s not always about how much you earn—it’s often about habits. Wealthy people steer clear of certain money traps that keep others struggling. Here are 10 habits they avoid, with practical fixes you can start today. These come from real observations of people who’ve built wealth, plus my own journey to better finances.
1. Spending More Than You Earn
Rich people live below their means, even if they make millions. Overspending on fancy cars or dinners adds up fast.
Fix: Track every dollar for 30 days using a free app like Mint. Cut one big expense, like eating out, and redirect that cash to savings.
2. Ignoring a Budget
Without a plan, money slips away. Wealthy folks know where every dollar goes.
Fix: Try the 50/30/20 rule: 50% for needs (rent, bills), 30% for wants, 20% for savings or debt repayment. Write it down or use a budgeting app.
3. Carrying Bad Debt
Credit card debt with high interest eats your income. Rich people use debt strategically, like for investments, not shopping sprees.
Fix: List debts, smallest to largest. Pay off the smallest first (snowball method) while making minimum payments on others. I paid off $3,000 in credit card debt this way in a year.
4. Not Investing Early
Keeping money in a low-interest savings account loses to inflation. Wealthy people invest in stocks or funds.
Fix: Start with $100 in an index fund via apps like Vanguard. Even $10 a month grows over time.
5. Emotional Spending
Buying to feel better—like retail therapy after a bad day—drains cash. Rich people pause before purchases.
Fix: Wait 24 hours before buying anything over $50. Ask: Do I need this? Most times, the urge passes.
6. Skipping an Emergency Fund
Unexpected costs, like car repairs, can wreck your finances without a safety net.
Fix: Save $1,000 first, then aim for 3-6 months of expenses. Auto-transfer $25 a week to a high-yield savings account like Ally.
7. Not Learning About Money
Ignorance keeps you broke. Wealthy people read about finances.
Fix: Pick one book, like “The Millionaire Next Door,” or listen to a free podcast like “ChooseFI.” Spend 15 minutes daily learning.
8. Hanging with Big Spenders
Friends who splurge pressure you to keep up. Rich people choose frugal circles.
Fix: Politely decline pricey outings. Suggest free activities, like a picnic.
9. Procrastinating on Goals
No clear money goals? You’ll drift. Wealthy people set targets, like saving for a house.
Fix: Write one goal, like “Save $5,000 in two years.” Break it into steps: $200/month. Track progress weekly.
10. Avoiding Smart Risks
Playing it too safe (like never investing) limits growth. Rich people take calculated risks, like starting side hustles.
Fix: Try a low-risk hustle, like selling old clothes on Poshmark. I made $300 last month doing this.
Real Impact of Changing Habits
These mistakes held me back until I started budgeting and investing small amounts. In two years, I saved $10,000 and cut my debt in half. Small changes compound.
Start Today
Breaking these habits isn’t instant, but pick one to tackle now. Track spending this week or read a finance article. Each step moves you closer to wealth.
Want a clear plan to fix these habits? Download my free guide on practical steps to financial independence, no matter where you’re starting from. It’s packed with easy strategies and worksheets to transform your money mindset. Grab it now and take control of your finances!