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hey guys what's up i'm erin and welcome back to the channel now while we may feel like we are in control of our lives the fact of the matter is the vast majority of our lives we live on autopilot that is to say that the vast majority of our actions are driven by our habits in fact studies show that as much as 40 percent of our day-to-day actions are driven by habit not careful thought and consideration so it's clear that habits have a big impact on our lives and if that's the same with our money habits they have a big impact on how we spend our money save our money and even invest our money you can have money habits that help you become wealthy or money habits that are keeping you poor today i want to go over those common money habits that i see people have that are keeping them poor or at least holding them back from building wealth your habits have a powerful influence on your life it is very important to be aware of what your habits are and how they are affecting you in your everyday life and especially your money habits because they are going to dictate if you become wealthy if you're just scraping by or if you're driving yourself into debt so without further ado let's dive into these common money habits that keep you poor money habit number one not being knowledgeable about your money no one is ever going to care about your money more than you do so you owe it to yourself to be financially literate to understand your money and to take care of your money at the most basic level you want to be following a budget you want to know all of your income sources how much money you're making where that money is coming from and also on the flip side where that money is going what all of your expenses are and you want to be doing this every single month with a budget you are in control of your money rather than your money controlling you there are several different types of budgets out there just choose the one you like and stick to it i have several videos on budgets there are spreadsheets websites apps you can find one pick the one you like and stick to that you want to be completely organized with your finances and this means going beyond budget this means you're going to be looking into your credit card accounts on a regular basis checking those transactions and making sure they're accurate checking the balances of these statements looking into your checking account as well as your savings accounts what about your investments you need to be checking on those regularly too maybe once a month or at least quarterly you want to know where you stand financially same goes with your debt and there's actually many ways you can do this in a convenient manner there are sites where you can link all of your financial accounts in just one spot there are sites like mint they have a secure site where you can link all of your accounts credit card savings checking investments etc and you can see everything all in one place alternatively you can create your own spreadsheets and you can keep records it does require a little bit more work but hey some of us like to be a little bit nerdy with money and that's just fine the point is you should have a very clear picture of your money and your finances at any given point in time at no point should you ever look at yourself and say i have no idea what is happening in any of my accounts i have no idea how much money i have where it's going etc and so forth that is a recipe for financial disaster money habit number two putting yourself last a new month start and so does all your bills we have the mortgage or rent car payment insurances internet your boyfriend has a birthday or you promised your kids that you would get them new sporting equipment the list goes on there is always someone or something asking for your dollar wealthy people do not put other people's needs ahead of their own instead wealthy people pay themselves first whereas poor people tend to pay themselves last with whatever is left over after they've already taken care of everyone else's needs if you do that you might find that there's just too much month and not enough money treat your money like you would the airline mask you put your mask on first before you assist anyone else the very best way to do this is to make it automatic set up an automatic withdrawal from your checking account the same day or the day after you get your paycheck on that day have that money withdrawn put into your savings account or your investment account before you ever get a chance to see it let alone spend it money habit number three trying to keep up with the joneses remember no matter who you are there is always someone who is going to make more money than you and therefore can spend more money than you in today's society with instagram and facebook and tick tock we are constantly being bombarded with people who are wearing the latest fashions have the absolute latest technology or taking phenomenal vacations but remember what you're seeing is a highlight reel so whether these are people you actually know personally or people you just simply follow virtually you have no idea what their finances truly look like you don't know if they're driving themselves deep into debt to support this fancy lifestyle online or if they're perhaps receiving assistance from the bank of mom and dad as so many 20 and 30 year olds out there do you have no idea what their finances look like in fact 37 of millennials regularly report receiving assistance from their parents a full 59 percent report receiving assistance just a handful of times a year and you always have to keep in mind that there really are people out there who are willing to drive themselves into debt just to support some kind of fancy lifestyle that they can promote on instagram you don't want to be one of those people you have to remember that your financial journey is unique to you your budget your savings your investing that is your own personal journey if you are constantly being surrounded by friends who live in bigger houses have nicer cars and taking nicer vacations you have to be aware that at some point that may start to influence your lifestyle and you may start to go into debt or if you have friends who are constantly inviting you to go to fancy restaurants or partake in activities that you can't particularly afford that month say it doesn't fit in your budget you have to be willing to tell them no that it does not work for you that month if they are truly your friend they will understand and they will support you on your financial goals your friends as always should want the best for you remember that playing keeping up with the joneses is a loser's game there will always be someone out there who can spend more than you you don't have to try and keep up remember the goal for you is to live a life that is meaningful and brings you the greatest happiness and work on your own personal financial goals they are not anyone else's goals habit number four paying extra nobody wants to pay more than necessary but if you adopt this sort of blase attitude with finance that's exactly what can happen for example if you don't pay attention to when your bills are due you can be hit with late fees and interest charges there is late fees on rent payments and utilities credit cards as we all know or even taxes if you don't pay them on time or say you're not paying attention to the balance of your checking account and you over draft your account guess what you're going to be hit with a fee all these fees and interest charges add up and they can add up very quickly if you're not paying attention or perhaps say you get home from work every single monday totally exhausted and even though you have a fridge full of food because say you do your grocery shopping over the weekend you can't be bothered to cook simply you are just that exhausted it's much easier to pick up your phone and order something from say ubereats right well you could plan ahead you could prepare a meal that you could simply throw in the microwave and reheat and voila you have dinner in just a couple minutes and you saved yourself those 40 delivery charges from ubereats have a plan and prepare and that way you don't have to spend extra money just for convenience habit number five buying things we don't need now we all buy things we don't need from time to time of course we do we're human unless you are an absolute bare bones minimalist and you know how to go through life without spending any extra i am so jealous please teach me your ways but one day my friend and i we went to target we pulled in and she said to me i don't know what i need here today i'm gonna let target tell me what i need i thought it was a cute statement i laughed but that kind of attitude taken too frequently can actually hurt your finances or look at stores like tj maxx and marshalls has anyone ever actually needed anything from there i actually just got back from there about 10 minutes ago and let me tell you i have never had a trip to tj maxx or marshalls that i got anything i absolutely needed everything i got there i could have totally lived without but i did pick up these heavenly hunk chocolate chip cookies that are so amazing no they're not a need but they're delicious my point is you get things you don't need all of the time it's fine to occasionally buy things you don't need i'm not saying that we have to have this militant attitude of only necessities however if we're not careful we can far too often buy things we don't need and that can really have a negative impact on our budget for example let's say you just buy something because it's on sale at that point you're not really saving money doesn't matter how good the sale was if you were never going to buy that item anyway well now you just wasted that money on a sale or every time you add an extra item to your cart just to get free shipping did you really need that extra item maybe you could have waited to place your order when you actually needed something else or for those people who sign up for new credit cards and they want to get those sign up bonuses and perhaps they put some things on their credit card that they didn't actually need but they had to hit a certain spending limit i am all for credit cards and taking advantages of those sign up bonuses a free shipping is amazing sales are amazing but you don't want to buy things you don't need just to take advantage of a sale or just to get free shipping or heaven forbid just to get that extra bonus cash from a credit card only buy things you truly need don't throw in an extra 10 20 30 every single time you make a purchase just for the heck of that free shipping number six not being prepared for an emergency an alarmingly high percentage of americans are ill prepared for even a couple hundred dollar emergency without having an emergency fund money that you can turn to when something inevitably comes up in life many people resort to credit cards and at an interest rate of 18 this is a really scary place to start building up debt emergencies happen because well life happens and the very best thing you can do to protect yourself is set some money aside in this emergency fund the best place to start is start by saving up a thousand dollars a thousand dollars will cover many emergencies that do come up but obviously you're going to want to build this up a little build it up to cover at least three to six months worth of expenses then you know you're in a safe place and remember don't touch that emergency fund unless you actually have an emergency habit number seven waiting to save now i know i talk about this one a lot on this channel but it bears repeating delaying your start to savings makes it dramatically harder to build wealth the longer you wait to save the more you are going to have to save in order to reach your goals if you started saving at 20 years old and say you want to be a millionaire at 65 you would have to save just 200 a month if you started at 30 you would have to save 450 a month if you started at 40 you would have to save 1100 a month to hit that same million dollars at 65 years old and here's where things get really interesting if you were that 20 year old who started saving that 200 a month by the time your investments were worth 1 million dollars you would only have contributed just over 100 000 of your own money the rest came from interest returns in the market if you started at 30 and you were doing that 450 dollars a month you would have contributed just under 200 000 to get that million dollar nest egg and if you would have waited until you were 40 contributing that hundred dollars a month you would have put in over three hundred thousand dollars of your own money so the longer you wait the more you have to contribute of your own money the harder you have to work to make that million otherwise you start earlier you can invest less your money does more of the legwork number eight being complacent about debt now i'm not a huge fan of debt i know dave ramsey but i just don't like owing anyone anything but with that said i do believe that there is a time and place that you can responsibly use debt debt can help you to buy a home or it can help you to buy a car to get to and from work or it can help you pay for school which can help you get a job to pay for your life but with all that being said i think most people are too quick to take on and accept debt i think you would do yourself a great service if you just pause before considering accepting any debt i think there's a lot to be said for living a debt-free lifestyle i truly don't think most 18 year olds understand the consequence of tens or even a hundred thousand dollars worth of student loan debt they don't understand how that's going to impact their life when they're 20 30 40 or even 50 years old most people don't even blink an eye when the car dealership says here's a brand new car all you have to do is sign for this loan that goes eight to ten years news flash you don't need a car loan that goes that long and if that's the loan rate you need in order to make that car affordable it's not affordable to you you need a lower priced car and we also live in a society where 74 of americans are willing to go into debt for a vacation you should never be going into debt for a vacation like i said i absolutely believe that there is good debt and there is bad debt but i do believe that most people are willing to accept too much debt in today's society you have to be careful with debt because getting out of control with it it can really wreck your life and i think a lot of people just take on debt because they look around them and they assume everyone else is taking on debt so they say well if they're doing it well so can i no matter the type of debt you're taking on you want to be cautious with it and if you don't believe me tune in to the dave ramsey channel he has some horror stories that will definitely scare you into living that debt-free lifestyle so there you have it eight habits that are working against you on building wealth and building a brighter financial future if you looked at these habits and you thought hey i have one or two of those don't worry all is not lost all you have to do is work on putting new better habits in their place and kicking those old habits to the curb it does take time but remember none of us are perfect we are all works in progress so just work on adopting healthier money habits and you will get there too you can always get to your money goals no matter what point you are in life so i hope you guys enjoyed this video give it a like on the way out if you are new here please consider subscribing and i will see you next week as i post new videos every single week bye [Music]