5 'Normal' Money Habits That Keep You Poor

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Normal habits that make people broke.

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Over 40% of our daily actions are just mindless and habitual. And when it comes to personal finance, the percentage is probably much higher because many people make illogical financial decisions. In this video, I share five common money habits that people have the end up making them poor.

1. Spend Credit, Pay Off Debt

Many people choose to spend money they get from a credit lender in the form of a credit card or a loan, and this causes the prices to be inflated because the interest rates from these credit lenders are often high. A person might spend $575 on a TV using credit compared to spending $500 using their own money. To avoid this toxic financial habit, it is important to have patience in your life. It is important to take the time to save money and once you have enough money saved, then you can buy whatever you want without having to pay high interest rates.

2. Setting ‘No Money’ at -$10,000

No matter how bad you are with money, there comes a point where you no longer can make irresponsible, careless decisions, and you are forced to cut your spending to save money. And this is because you no longer have any access to money and you have "no money." The interesting thing about this is the idea of having "no money" varies from person to person. Many people believe that "no money" is when all of their credit cards are maxed out, all of their bills are behind, and their bank is charging them overdraft fees. They believe that having "no money" is when they no longer have any options. To avoid this toxic financial habit, start making decisions to cut spending and save money before you go below $0.

3. Getting Banks To Tell You What You Can Afford

The financial crisis of 2008 happened because banks were lending money to people who couldn't afford to meet their monthly payments. And this financial crisis was partly due to banks being irresponsible with lending, but it also occurred because people allowed the banks to tell them what they could afford. Time has passed, but the banks are still handing out money to anyone who is willing to take it regardless if they can actually afford it. If you let the banks tell you what you can afford, you will probably be left with payments that make it impossible to get ahead. To avoid this toxic financial habit, it is important to be responsible, look at your own financial situation, and decide what you can afford to bring in your life.

4. Paying Yourself Last

Many people are very self-less with their money. Once they get their paycheck, they give all their money to people whether that's for paying rent, a car payment, bills, or other payments. And once they have paid everyone, there is no money left for themselves. To avoid this toxic financial habit, it is important to determine a specific amount of money to set aside each paycheck to save or invest before you start paying your bills. When you do this, your bank accounts will constantly be rising.

5. Not Investing In The Stock Market

Many people are afraid of the stock market and choose to not invest because they think that they will lose all of their money overnight. Instead, they put money in a savings account, and although this is important, if all of your money is just sitting in a savings account, you will lose money each year due to inflation. It is important to learn about the stock market and a simple type of investment called "index funds," so that you can grow your money over time.

**I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make. Links above are affiliate links where if you click and order, I will receive a commission at no cost to you. **
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What's another normal money habit that makes people poor?

ElAgustin
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Your videos have totally changed my finances this year. I have saved more money than I ever have and am closer and closer to being debt free. Thank you, Austin!

JessLotte
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Hi Austin, I am from India. I'm 33. My father never had debt, but he didn't save much, I think he was content with what we had. When covid hit, I was at -$30000, then I found Dave, and now I am around -10000. But, I will be debt free by the end of this Year. I am super glad that I found you. My expenses are pretty low now and I have more time for my family. Would love to meet you in person. Thanks for sharing your valuable thoughts! 🙏

MoneyPlusHealth
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Love watching your videos, so much common sense. #3 has driven me absolutely crazy for ages, the idea that the bank will tell you what you can afford is just nuts. When we bought our current house, we knew exactly what we wanted and what we wanted to afford. The bank kept trying to push us to buy a bigger house because "you can afford it". We didn't listen to them and stuck with our plan. That was in 2010! So obviously they learned nothing from the prior situation.

flohough
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Hello 👋👋

I Save Emergency Funds in two sets.

1. Emergency Funds for Touch.

2. Emergency Funds for No Touch 😊

arafatbukhari
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I was told by my late father there are two types of people. One lives on what he earns., the other lives on what he takes home.

grantchanin
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You put a lot of effort into these videos and it shows. Loyal follower.

derrick
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Yes Yes Yes Augustine Patience🙌🙌🙌!!! Know when to hold them know when fold them....

eleanorward
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Spot on, Austin!!!

Invest the max in your Roth IRA each year. Your 60 yr old self will thank you.

AnnMitt
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Great video! I think it's so important to recognize these 'normal' money habits that can actually hold us back from financial success. It's time to break free from the mindset of just getting by and start building wealth instead. Looking forward to implementing some of these tips in my own life!

shumatsuopost
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Excellent video 👍 love the sarcasm….it really hits home 🏴󠁧󠁢󠁷󠁬󠁳󠁿

rachelwalsh
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"Own GOLD / Silver" Store your wealth through troubled times. If you don't Hold it, you don't Own it!
INTRINSIC VALUE (REAL)
note: "It is tough to make Predictions espicially about the Future." Yogi Berra

cajunjamis
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Love the sarcasm! Especially when you said we are SO SELFESS when we give all of our money away. 😏Yeah, right!

juliem.
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Another great video as usual Austin! Thank you for your insights - they create an enhanced level of financial awareness in your subscribers.

TeaLightCooking
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OMG habit n3…
As I have what is considered a good job the bank landed me very easily the amount I was asking for my first house purchase … they even could have landed me more ! But the reality is now I’m not comfortable… thank god I paid back my debts to my friends and family and try to be frugal now I can now even save, but it has been a long road.
I wish I was told this then

rezounours
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Regarding the economy, I used to know all the answers. Now somebody changed the questions.

andrewminjiras
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I enjoy watching these videos with my lunch every week. I agree 100% with this mindset. I’m concerned about whether Klarna/clearpay and these buy now pay later schemes are being regulated properly?

OfficialCalbel
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Loved this! Can you make some videos on how to invest in the stock market for beginners?

rachellane
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Most your age didn’t fully live the 2008 crash. Keep telling people because history is, again, rhyming.

CAGChannel
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I use cash for pretty much everything. Don't have a credit card. Don't want or need one. No payments outside of my utilities & student loans

Mysticbladegod