People who stay in the cycle of remaining broke, and continually live from pay-cheque to pay-cheque, usually have a foundation of poor financial habits. Until they address these unhelpful habits, they will stay in the poverty cycle, no matter how much their income increases. 

 Here are the most common habits: 

A failure to consistently save money. 

People that are consistently free of financial challenges have a consistent saving habit. There’s always money available to handle the inevitable financial emergencies if you save part of your paycheck each time you get paid.

You can start to break this habit, by starting to save on a regular basis. Even a small amount per month can help you form the habit. Choose your amount, one that won’t leave you destitute, and set up an automatic payment to transfer the amount into your savings account as soon as you are paid each month. 

 No budget. 

Everyone needs a budget. It is just a way of setting financial limits so that you don’t overspend in some areas, resulting in you needing to cut back in others, or worse still, using debt to cover the excess spending.    

The main reason I hear as a money coach, for not creating a budget, is that it is too restrictive.  Yet the only restrictions you have are your total amount available for spending (your income), and any fixed payments you have previously signed up to, such as the level of your mortgage or rent, and any debt you need to repay. These restrictions already exist, but without a budget, they are often ignored! 

Excessive spending. 

The more you spend, the less you have to save. It’s that simple. Spending too much money makes you vulnerable and more likely to have financial challenges. Very excessive spending leads to accumulating debt, which is the ultimate financial curse. 

 Take this next month to be consciously aware of where and when you spend your money. Before every purchase, just ask yourself “Do I really need this?” 

 Excessive use of credit cards and other forms of debt. 

Debt is a significant obstacle to financial health and stability. Once accumulated, it can be cumbersome to eliminate, and most debt comes with expensive terms that make debt an especially costly way to spend money.

Ignoring bills. 

No one likes to pay bills. However, bills have a way of piling up and eventually have to be paid. Ignoring them tricks your mind into thinking you still have money to spend on other things. This is a huge mistake.

Spend a few minutes each week paying your bills. Make it a ritual you perform one day a week. If you are in business for yourself, make sure that this ritual includes your business bills.

Regularly paying penalties, fees, and excess interest. 

Here’s an interesting fact – credit card companies earn more money from late fees than they do from interest  

To avoid late fees, ensure that you allocate enough funds to pay your debt and other commitments in your budget, and then set up automatic payments so you don’t miss a deadline! If you can’t set up an automatic payment, then set yourself a reminder on your calendar or phone.
 

 Are you guilty of any of these habits? 

 If you are, then now is the time to change.

Remember, positive habits lead to positive results. Ensure that your financial habits are leading you to a place you want to be in.