This featured image displays the post's title being 5 bad habits that keep you poor (and how to break them). The top 5 bad habits are: Impulse Buying, Scrolling through Social Media All Day Long, Failing to Save and Invest, Procrastination and Ignoring Debt.

5 Bad Habits that Keep You Poor (and How to Break them)

by with No Comment Tips & Ideas

I’m confident to say that each and every one of us has guilty pleasures!

But as soon as these habits involve spending money, it becomes difficult. 

In fact, bad financial habits prevent many people to build significant wealth in their lives. 

Isn’t that a pity? 

Though some of you may know their guilty pleasures, there are most certainly habits that you don’t identify as bad yet!

This post is for you!

I want you to use this post to identify your bad habits that keep you poor. 

Discover 5 bad habits that keep you poor and how to break them.

Table of Contents

5 Bad Habits that Keep You Poor (and How to Break them)

1) 5 Bad Habits that Keep You Poor (and How to Break them)

  1. Impulse Buying 
  2. Scrolling through Social Media All Day Long
  3. Failing to Save and Invest
  4. Procrastination
  5. Ignoring Debt 

2) The Takeaway 

3) Final Thoughts

5 Bad Habits that Keep You Poor (and How to Break them)

For those of you, who are short on time, here is a quick break down of the top 7 bad habits that keep you poor:

  1. Impulse Buying
  2. Scrolling through Social Media All Day Long
  3. Failing to Save and Invest
  4. Procrastination
  5. Ignoring Debt

1. Impulse Buying

You walk into a clothing store and see a wonderful jacket that is on discount.

Though you don’t need a new jacket and can’t afford it either, you spontaneously decide to buy it. 

Retailers are super skilled at creating this sense of urge to buy something (e.g. through discounts).

And here is the problem: Buying things you don’t need and don’t have the money for.

These unplanned expenses can quickly add up, leaving you with little to no savings and a cluttered home filled with items you rarely use.

Sounds bad, right?

What can we do against it?

How to Break It: Honestly, I’ve been making impulse purchases myself. But what seem to be a highly effective method to break this habit is setting yourself a waiting period:

If you see something you want, wait 24 hours before buying it.

Why?

This gives you time to assess if it’s a necessary expense or just an impulsive desire.

Another tip I can give you is creating a shopping list before you set foot into any store – and to stick to it by any means!

2. Scrolling through Social Media All Day long

Just by looking at it, this sounds like a very bad habit. 

And it definitely is.

Yet many people tend to spend hours over hours on social media platforms. 

And I have to admit: Time flies when being on Instagram, TikTok, …

And that’s because of a simple yet dangerous reason: Algorithms!

Every social media platform has its own mechanisms to keep you engaged in new content. 

The worst about it? Social media posts rarely give you any value. Because let’s be honest who remembers a clip on TikTok you’ve seen a couple of hours ago?

In order to build wealth, we have to understand one crucial part: Time is our biggest asset!

Accordingly, we have to cut any time-wasting activities as much as possible.

And in most cases a big part of that is your social media behavior.

How to Break It: Well, the most effective approach would be deleting social media apps from your smartphone.

But you can start by downloading screen time limiting apps. These apps can be a great first step to reduce your time on social media platforms. 

3. Failing to Save and Invest

Living from paycheck to paycheck without saving for your future is a dangerous habit.  

Why?

Well, it leaves you unprepared for emergencies and without any savings it is hard to seize investment opportunities that can grow your wealth.

Without savings, unexpected expenses can force you into debt (see below), and missing out on investment opportunities can result in lost potential for financial growth.

How to Break It: Try to start an emergency fund and aim to save at least three to six months worth of living expenses.

You can also set specific savings goals and create a plan to achieve them.

Once you have some money left, think about different types of investments: stocks, bonds, and real estate, to increase your wealth!

4. Procrastination

Let’s be honest: Nobody willingly loves to deal with their finances.

What do people do with uncomfortable tasks?

Putting off things until tomorrow. Tomorrow becomes in a week and a week a month, a month …. you get it! 

Don’t do this!

Putting off financial decisions, such as saving, investing, or creating a budget, can lead to missed opportunities and increased stress.

Procrastination often results in reactive rather than proactive financial management.

Everything just seems to happen all of a sudden!

Just think of an assignment you put off until the very last day. You end up writing everything under pressure without time for mentioning important details.

It’s really not that different with your financial duties!

When you delay important financial tasks, you may end up making hasty decisions under pressure, leading to suboptimal outcomes.

In the worst case, procrastination can even result in penalties and fees for late payments, leaving you with further financial burdens.

So I think we agree that procrastination is bad!

But what can we do against it?

How to Break It: A strict deadline is key:

Set specific financial goals with deadlines. Break tasks into smaller, manageable steps and tackle them one at a time.

If you’re not good in sticking to deadlines (like me too…), consider using tools and apps to remind you of important deadlines. There are plenty of them in your AppStore such as Structured-Daily Planner.

What also helps is to create a routine for handling your financial matters: Set aside time each week to pay bills, review your budget, and track your progress towards financial goals. 

5. Ignoring Debt

Taking on debts for useless things is one of the reasons many people stay poor!

If you’re already in this situation: Don’t worry I got you (see down below).

The best thing we can do is stop ignoring our debts!

That’s because ignoring debt leads to accumulating interest and fees, making it even harder to pay off.

Debt can also damage your credit score, making it more difficult to obtain loans for important purchases like a home or car.

And apart from the effects on your wealth, being in debts just feels uncomfortable!

At the end of the day, we want to pay off debt fast!

How to Break It: Analyze your debt situation and create a plan to pay it off.

Try to focus on paying down high-interest debt first.

Develop a repayment strategy, such as the snowball or avalanche method, to systematically eliminate your debt.

And of course:

Avoid taking on new debt while you are working on paying off existing balances. 

Related post:

The Takeaway

At the end of each of my posts I provide a short takeaway. Just to make sure you remember everything you learned today! 🙂

Here are the key advice I want to give you for building wealth:

Impulse buying leads to purchases you don’t need and don’t have the money for. 

Set yourself a waiting period of 24 hours to before buying something!

Don’t spend hours on social media, this is just time wasting!

Instead, use your time for building wealth.

Remember: Time is our biggest asset! 

Try to focus on saving money for emergencies and seize investments opportunities for building wealth!

Set yourself saving goals and an emergency fund to get started!

It is crucial to deal with your financial tasks quickly to avoid unpleasant surprises.

Set yourself deadlines for specific financial tasks.

Apps may help you sticking with your deadlines! 

Paying off debts for useless things, is a huge factor that keeps many people poor!

If you’re already in this situation, here are some quick tips:

  1. Analyze your debt situation 
  2. Pay off high-interest debts first
  3. Develop a repayment strategy 

For more insightful advice on paying off debt faster, consider reading this post!

Final Thoughts

I hope you could identify some of your bad habits and now start breaking them!

You got this!

If you have any questions, feel free to get in touch in the comment section below or write me an email!

Picture displays the post's topic being how to pay off debt faster.

How to Pay Off Debt Faster (Ultimate Guide)

by with No Comment BorrowTips & Ideas

Among all of the things life can throw at you – rent increase, job loss, electricity bills- being caught in debts is one of the most uncomfortable situations one can be in!

With an average of 77% of American households being in any kind of debt you are not alone. Being in debt seems to be a widespread issue for many US households.

The longer you carry debt, the more interest you’ll pay over time. 

This makes it essential to pay off debt faster. And here is how!

Table of Contents

How to Pay Off Debt Faster

1) What is Debt and What Makes it Dangerous?

2) How to Pay Off Debt Faster

  1. Assessing Your Debt Situation
  2. Stop Making More Debts
  3.  Budgeting 
  4. Make Minimum Payments
  5. Exploring Debt Repayment Strategies
  6. Increase Income
  7. Set Yourself a Payoff Date and Be Motivated

3) The Takeaway

4) Final Thoughts

What is Debt and What Makes it Dangerous?

Before having a look at the steps to pay off debt faster, let us clarify the definition of debts.

Debts is pretty much like borrowing money from a friend or a bank with promise to pay it back later. So far so good. 

But there are also the so-called interest rates, meaning extra money you have to pay back. That is where it becomes uncomfortable.

So paying off debt always means to pay back the money you have borrowed plus interest rates. 

Debts are a common way to buy things you can’t afford right away, like a car or a house, or to cover expenses when you’re short on cash.

While debt can help you get what you need or want sooner, it can also be risky.

If you borrow too much or can’t make the payments on time, it can lead to stress, financial problems, and even damage your credit score.

That’s why it’s extremely important to be careful with debt and only borrow what you can afford to pay back later on.

How to Pay Off Debt Faster

Fortunately, there are several steps you can take to pay off debt faster. While assessing your debt situation and stop making more debts are the absolute fundamentals, using debt repayment strategies and increasing your income can really accelerate your debt repayment. 

For more in depth-knowledge just read on and be ready to change your financial future!

Assessing Your Debt Situation

This step is crucial! Before fighting your debts it is essential to face the truth. 

Debts come in various forms including credit cards, student loans or personal loans. 

So grab pen and paper or an Excel Table if you are not feeling old-school, and determine how much debt you have to pay off. 

In your calculation you should include factors such as all outstanding balances, interest rates and minimum payments.

This initial step might be the most uncomfortable one, but it is truly the most crucial. 

You can hardly fight the unknown, right?

Stop Making More Debts

Now that you have an exact debt amount in front of your eyes, it is now time to make this number zero.

Fighting debts but still paying with credit cards. This doesn’t make any sense!

If you start paying off on the one end, you cannot create new debts on the other end. This way, you can barely free yourself from your situation. 

So try to only spend money, that you have in your pockets. No loans ands credit card payments – at least if you are not 100% sure that you can pay it back.

Budgeting

Budgeting is a powerful tool to gain control of your expenses. There are several budgeting pans including the 70-20-10 rule.

This for instance translates to spending 70% of your income on wants and needs, setting aside 20% for savings and investments, and using 10% of the remaining income to repay debts. 

While such a budgeting plan can reduce the risk of being caught in overwhelming debts in the first place, they can be still useful for people who are already in these situations. 

In other words: Make your own plan! Look where you can cut expenses. For example, make your own 50-20-30 plan with 30% of your income being uses to repay debts. 

Make Minimum Payments

As you are now in your repayment mode, it is essential to start by making your minimum payments consistently.

Making your minimum payments is the most fundamental point when trying to pay off debt.

Being not able to repay the minimum amount of your debts will lower your credit score. And that’s really not what you want to happen!

Making your minimum payments regularly is thus the absolute basis of your repaying plan.

Exploring Debt Repayment Strategies

Once you managed to make all of your minimum payments you will successfully start your repaying process, but slowly. 

To accelerate this process there are repayment strategies worth paying attention to.

It is even worth applying these strategies for every single dollar you have left after having made all of your expenses and your minimum payments.

So let’s have a look at the two most proven methods:

Snowball Method

The snowball method involves paying off debts in order of smallest to largest balance. 

This method is great for people who struggle to stay motivated.

Why?

Well, starting by paying off the smallest balance will help build momentum. You will feel a sense of accomplishment pretty soon. 

Avalanche Method:

In contrast, the avalanche method focuses on minimizing interest payments and saving money in the long run.

How?

You simply start by repaying the debt with the highest interest rate and continue making your minimum payments on other debts.

Using this method will save more of your money than the first method. 

Seeing progress may take longer here, as you start with your largest debts and interest rates. 

Increase Income

You can also optimize something on the other end! Just make more money. Easier said than done, I know…

But nowadays there are so many opportunities to make an extra income.

Due to digitalization you cannot only earn money offline but also online. 

And this makes things a lot easier.

Here are a handful of side hustles you can take on in 2024:

  • Freelance Writing or Editing 
  • YouTube Channel or Podcast
  • Affiliate Marketing
  • Fitness Training (virtually or in person)
  • E-commerce Store

Apart from these, you can also start by making money passively. There are a lot of ways to do so.

Learn about the best passive income ideas in 2024!

For whatever way you ultimately decide on, make sure you direct any additional income towards debt payments to pay off your debt faster.

Set Yourself a Payoff Date and Be Motivated

Do you know what’s better than paying off debt? Setting yourself a deadline!

Why?

It makes you even more disciplined and motivated. Tell yourself that you HAVE TO be debt-free to a specific date.

Even if you not manage it to this date, it has brought you a lot nearer to being debt-free!

Keep your goals front and center by visualizing your debt-free future and reminding yourself of the benefits of financial freedom.

Less stress, more flexibility …, isn’t that great?

Celebrate even small victories along the way – such as an extra payment or paying off a credit card balance!

Perhaps you can also seek support from friends and family.

Whatever helps you staying motivated: DO IT!

The Takeaway

At the end of each of my posts I provide a short takeaway. Just to make sure you remember the most important things you learned today!

Paying off debt faster is crucial for saving money on interest. The longer you carry debt, the more you’ll pay at the end of the day.

Plus, paying off debt reduces your financial stress.

Making a list of all of your debts and start budgeting your income is key when fighting your debts.

If possible, try to cut your expenses and use it to make regular payments.

Start by making the bare minimum payments.

Once you covered the absolute basics you can accelerate the whole proccess.

Use additional money to pay back your debts by using wither the snowball or the avalanche method. 

Ideally, start side hustles to make extra income and use it to pay off your debts faster.

Final Thoughts

Being caught in debts is a horrible situation that might seem inescapable. But that is not the case.

As you learned you can take several steps to pay off your debts faster. 

Just make sure to start as soon as possible, so that you can save money in the long run.