Do you have habits that are keeping you poor?

Most of what we do with our money is automatic. We pay our bills, buy the same things, use the same companies and service providers, without even thinking about it. It’s all on autopilot, much like the way we brush our teeth each day.  This was one of the reasons that we were in debt for so many years. We were behaving like this without even realising it!

When we did become aware of what we were doing and changed our behaviours, we were amazed at how much debt we were able to pay off.

Below are the 8 money habits that keep you poor. 


This is such a common bad money habit. Most people put themselves at the back of the queue when it comes to paying themselves. They will pay their rent, pay their phone bill, their car insurance, buy some nice shoes, maybe eat out a few times a week or order in a takeaway. They tell themselves that they will save whatever is left at the end of the month.

The problem is, there usually isn’t any money left at the end of the month and the savings never happen.

Ensure you pay yourself FIRST

Financially savvy people do the exact opposite and pay themselves FIRST.  Before they pay their bills, before they eat out, before they buy themselves that little treat, they set aside a portion of their income for their savings. They set up automatic transfers to their savings account so that the money leaves their current account just like a regular bill. Then they pay their bills and live on what’s left.

So… it’s time to treat saving money like a bill. Work it into your budget and make it non-negotiable. Every time you get paid, commit to saving 10% or 20%. 

Having disorganised finances

It’s almost impossible to keep track of your financial situation if you have credit cards open everywhere and so many loans that you don’t even know how many. How on earth can you keep on top of things if you have all of that chaos going on? You’ll be so put off checking how much you owe and to whom if you’re going to have to spend hours each month just gathering the paperwork and account details.  If you don’t know how much you owe and how much you’re spending each month on debt repayments, then it will be impossible to create a budget to live by.

If you’d like to see how to start budgeting, take a look at my post on how to create a budget.

Banking Apps

There are so many great apps that can help you to keep your finances in order. My absolute favourite is Starling. It’s an online banking app and I use it to keep track of my sinking funds. I can see at a glance how much I have in savings for certain events, such as Christmas or birthdays. Another great all-round app is the Money dashboard app.  It allows you to link all of your bank accounts to the app so that you can keep track of them all in one place. This includes the providers that hold your debts. You can just log into your Money Dashboard app to see at a glance how much you owe. You can track the money you have coming in and all of your expenses too. It does take a while to set it all up but once you’ve done it you’ll be amazed.

But If you’re anything like me, you’ll love good old pen and paper! And there’s nothing wrong with that at all. You just have to find what works for you. If you choose a system that you find too complicated and takes too much effort you aren’t likely to stick to it.

Each month I write out my new monthly budget and this allows me to see how much money I’ll have coming in and what’s going where. You can get yours here.

The truth is that it’s hard to take an honest look at your finances when you’ve avoided it for so long, but it has to be done if you want to become financially healthy. There have never been so many books and videos giving advice on how to budget and look after your money and there have never been so many great budgeting tools around to make the process easier for you. Take the bull by the horns and face your finances now. Set yourself some financial goals and take the first steps in working towards them.

Thinking debt is normal

We live in a society where almost everyone has some sort of debt. It has become totally normalised and we hardly bat an eyelid when popping large purchases onto a credit card. 

It’s a natural response to accept these behaviours as acceptable, rather than taking the action needed to address the problem. We often feel that people judge our success based on our material possessions and it’s no wonder we keep adding to the debt. We want to be seen as successful. Nobody wants to seem less successful than their friends or their neighbours. 

But this comes at a cost. When you are in a perpetual state of debt, you are left unable to plan for retirement. There isn’t enough money left to be able to save. You are robbing your future self. 

Debt is NOT normal

Get out of the mindset that debt is normal. If debt is normal then you don’t want to be normal! If you can’t afford the car you want then don’t get that car. Buy the car you can afford.

Hubby and I always had an obsession with Audis. They look nice and we love the way they drive but we could never have afforded to buy one. Yet, it didn’t even cross our minds not to get one. We just went ahead and got them on finance. One after the other. Those years that we had the cars were honestly some of the worst we’ve had. We couldn’t afford all of our bills. We were always stressed and anxious and we couldn’t sleep. But when we ‘needed’ an upgrade we didn’t once think that we should get a car we could afford. Nope – we went and got another Audi on finance. 

When we faced our debt head-on in 2018, the car finance loan was the one I was most keen to clear. It had caused so many years of worry and misery. Despite the fact that we are now debt-free and in a position to be able to buy an Audi outright in cash, we have a trusty old Vauxhall and are more than happy with it. In fact, we’re planning on keeping for as long as we can so that we can leave our money in the bank, earning compound interest. 

You may feel like you NEED certain items and that you can’t live without them, but it’s not until you try that you realise that you can indeed be happy without these things. 

You don't separate wants from needs

If you want to improve your financial situation you’re going to have to face one major thing – differentiating between wants and needs. 

We all have certain needs. These are things like somewhere to live, food, water, warmth, clothes, etc.  But it is often easy to confuse your wants with your needs. Take the car, for example. Maybe you need a car to be able to work, but do you really need a top of the range car? The car might be a need but the flashy model is a want. 

Take shoes as another example. Shoes are a need. But the latest pair of expensive trainers or another pair of designer shoes are wants.

When we give in to too many of our wants, it can cause huge financial stress and the result is that there is no money left at the end of the month to save.

Of course it is important to treat ourselves to some of our wants from time-to-time. After all, what is the point in working hard if we can’t enjoy some of the things we love? But some people think that the latest phone, designer clothes, a bigger house, eating out etc are all necessary.  But they aren’t. None of those things are necessary and problems can occur when people can’t afford to save any money or go into debt to be able to get these things.

So, be realistic about what you can afford and be mindful of the fact that you do need to prepare for your retirement. 

Becky, from The Lifestyle Blogger UK, has a great post about how you can avoid falling for consumer traps. 

Paying extra due to lack of planning

Not planning in advance and being caught unprepared always ends up costing you money. This can range from something as simple as not checking the weather and ending up having to buy yet another umbrella, to not planning your meals, costing you hundreds of pounds extra each month in grocery bills or takeaways. It could be having to pay overdraft fees because you forgot to check your bank account or paying a fee for a late tax return because you were so unprepared and forgot to submit your return on time. 

Take a few minutes to plan your day

All of these costs add up quickly but can easily be prevented with just a little foresight. Take 10 minutes each day to plan ahead and organise yourself. Check the weather forecast before you leave the house. Make a point of checking your bank account daily. Work these small things into your daily routine and you’ll have more money in your pocket at the end of the month.

Starting to invest too late

Most of us put off saving or investing until we have more money. I did this for years and years and I know many others who have done the same.  But this is a terrible idea. The ideal time never comes. We use excuse after excuse – not enough money, not enough knowledge, not enough time to learn and all the while we’re wasting valuable time. Time in which our money could be growing.  

If you start investing just £50 per month at the age of 20, by the time you reach 60 you would have amassed £280k. This is based on a 10% return. But if you only start investing at the ripe old age of 40, you would need to contribute £380 every month to get a return of the same amount. The younger you start, the less of your own money you need to feed in to your investments due to the magic of compound interest.

So do yourself a favour and start investing now. Even just a little is better than nothing and it will get you into the habit of making regular deposits to your savings. 


Relying on one source of income

The majority of people rely on just one source of income and this is essentially the same as putting all of your eggs in one basket.  If you lose your job then your whole source of income vanishes. You have nothing to fall back on and risk having to take on debt just to get by.

People who have extra sources of income, also known as side hustles,  have that extra buffer if their main source of income dries up. They are able to rely on their side hustle income until they can pick up another job. 

Those with more than one stream of income are able to send more money to savings and investments or even overpay the mortgage so that they can be mortgage-free sooner. 

Having more than one income stream helped me to pay off our debt much more quickly than we could ever have dreamed of. You can see how I earned extra money here. My main side-hustle income came from matched betting. I was able to earn thousands extra, on top of my regular job, and a huge amount of this was used to pay off our debt. I still do matched betting regularly and this allows me to maximise the amount of money we can send to our ISA and it also allows me to send regular mortgage overpayments to our mortgage provider. 

Spending more than you make

Spending more money than you make has to be hands down one of the worst things you can do and there is only so long that you can do this before you start to face real financial hardship. Indeed, this is the main reason that we got into such a large amount of debt. 

If you commit to writing out a monthly budget, you will be able to see at a glance exactly how much money you have coming in each month and exactly how much money you have going out. If you have more going out than you have coming in then you know that drastic action needs to be taken. You are going to have to start cutting out non-essential expenses. If you are still left with a deficit, you will have to try to increase your income. 

If you struggle with the thought of not spending money as and when you like to, then try to think of it in terms of what it costs you in work time. So if you get paid £10 per hour and the item costs £300 then you will have to work an extra 30 hours in order to be able to fund it.

Money habits keeping you poor