Have you often wondered where your money goes by the end of the month despite a decent income? Think bad money habits.

Unfortunately, money habits aren’t taught in school. Most people get them from their parents. And if your parents didn’t have good money habits, it’s likely that it’s rubbed off on you.

Unless you really focus on changing habits that are costing you in the long-run, you’ll likely always be having a hard time managing money, or creating a fortune. Following are the most common habits that keep people poor – even those with a good income.

You’re relying on a single source of income

Most people just rely on a linear income and try to tiptoe through life wondering why their wealth isn’t growing. Linear payments include a salary, allowances or one-time payments.

Smart people, on the other hand, tend to focus on creating sources of passive income. They come in the form of royalties, interest, profit, etc. They don’t rely on a single source of income.

In fact, 65% of people had at least 3 streams of income before making their first million dollars. A lot of people seem to think that creating a passive income is a quick and easy alternative.

While it is definitely the smart option, it requires a lot of effort and possibly even years of hard work before you can see your labor bear fruit. If you’re like me, the best way out is to create sources of passive income while keeping your day job.

If you’re just earning money via your job and not investing time and money on starting a side business or passive income project, it’s likely that you’ll eventually run out of luck.

Linear income is like carrying a bucket to the river to fetch water. After a while your energy levels and health may not remain as robust – that’s when the real problems begin.

You have poor saving and spending habits

At one point I was working for a PR agency in Dubai, and making some serious money. I was working really hard, didn’t have much of a life outside of work, didn’t have time for friends and family, and at the end of the day didn’t even have any savings to show for my efforts. Why?

Because I was spending every penny I earned on a fancy apartment in upscale Dubai, buying expensive clothes – I thought people would take me more seriously for it – and spending truckloads on a fancy car and gadgets.

While it’s good to improve your lifestyle when you can, if you’re constantly looking for ways to spend your money, you’re destined for failure.

Stop thinking about ways to increase your expenses as soon as you get a raise. Instead, work on saving first, and spending later.

Robert Kiyosaki, the author of Rich Dad Poor Dad, says, ‘Pay yourself first.’ Whether it’s an investment in real-estate or side hustle, or simply putting 20% or more of your earnings aside, do that first and take care of the expenses second.

Only 5% of the poor saved 10% of their income, according to this 5-year study. None saved over 20%. Certain habits keep the poor, poor. 93% admitted they never budgeted their spending.

66% admitted they were not frugal with their money. They also had a bad habit of spontaneous spending.

88% of the poor in the study had $5000 or more of credit card debt.

You’re always waiting to start your journey of success

How can you start your journey of success when you can’t move beyond the starting line? Whether it is fear, lack of capital or anything else; there’s no better time to start a business than right now.

While you’re worried about not having enough capital, somebody is being resourceful about whatever little they have and building something valuable from it.

While you’re complaining about having a ton of challenges, someone is solving those very same problems, helping society become better, and earning money in the process.

The answer to all these and similar problems is this; start today, be resourceful and cast your fear aside. More importantly, anything that you want to do has already been done by someone else. It means all you have to do is learn and try.

You don’t have a ‘growth mindset’

“In a growth mindset, people believe that their most basic abilities can be developed through dedication and hard work—brains and talent are just the starting point. This view creates a love of learning and a resilience that is essential for great accomplishment,” writes Carol Dweck in her book Mindset: The New Psychology of Success.

People with a rich mindset, or growth mindset, spend at least 30 minutes reading every day to learn. The rich were found to be reading all sorts of things that helped them understand and be more successful in life. It’s not that the poor don’t have time due to childcare, housework or other issues. The difference is that they choose to indulge in time-wasters more frequently – which brings me to my next point;

You don’t value your time

People often don’t realize it but time is a lot more precious than even money. The rich understand this all too well. They invest their time wisely in building a notable career or multiple side incomes.

According to this study, here’s what’s draining the time for most people;

  • 77% of the poor people admitted to watching more than 1 hour of TV every day. They prefer reality TV. While less than 67% of the rich watch less than an hour each day.
  • 74% of the poor people surfed the internet a lot more than was needed – more than an hour a day – while 63% of the rich spent less than an hour each day on the internet. This freed up more time to invest in self-education.
  • Conversely, only 11% of the rich said they read for entertainment. Most of the rich surveyed read biographies, books on career, history, money, and self-help.

You spend time with toxic people

One of the habits that keep people in a vicious circle of poverty and struggle is who they choose to associate with.

‘You are the average of the 5 people you spend most time with’. Regardless of how often we hear this advice, it just never gets old. Here’s a great article on why you absolutely must stop spending time with people who are toxic.

The more time you spend with people who are unhelpful, unsupportive, disrespectful, envious, resentful, dysfunctional or outright damaging to you, the less value all your time has,’ says Dan. S Kennedy in his book No BS Time Management for Entrepreneurs.

Almost 95% of the poor confirm spending time with people they consider toxic. No matter how hard you’re trying to change your circumstances, if you are associating with people who discourage you, pull you down, indulge in idle gossip, or bad habits –these mindsets are sure to rub off on you.

Instead, choose your circle wisely. Associate with people who are optimistic, upbeat and enthusiastic. If you don’t know where to find them, volunteer at a community nonprofit.

You don’t manage your anger

Feeling angry and frustrated is normal. Everybody feels those emotions at some point. But the way you express them can make or break your success.

“Anger, I found in research, was one of the most costly emotions. No matter how many good habits you had, if you didn’t have control over your emotions, you literally wipe out all the good that you do, because you damage relationships with people who would otherwise want to help you in life,” says, Tom Corley.

On the flip side, successful people choose their words carefully and weigh their impact before using them.


Could getting rich be a matter of adopting the right habits? The answer is, yes.  An abundance mindset is one that plays a major role in every aspect of a person’s life. Children, from an early age, pick up the habits of their parents without even recognizing it.

And if you’ve been taught that money is bad, it’ll be a long time till you’re able to yank those ideas from your mind in pursuit of wealth. Not to mention, such ideas can put kids at a big disadvantage.

You can learn insider secrets from biographies or by talking to people who are already doing what you want to do. Learn, bootstrap and go.