Do you feel like a financial Charlie Brown?
What I mean by this is do you struggle to pay the bills each month? More importantly, do you feel like you’ll never get ahead and get into the middle class? Escaping poverty isn’t easy, but it’s possible.
Even if you “make a good income,” you might still live paycheck to paycheck by practicing these habits that keep people poor.
1. Playing the Lottery
While I’ve purchased a few scratch-off tickets when I just turned 18, it’s been well over a decade since I last played the lottery. Some of these reasons are for moral convictions. Mostly, it’s because the odds of winning are so low. And, if I’m going to spend money, I want to get something in return.
If I walk into a gas station, I’ll buy a donut or a cup of coffee instead. But, that’s me.
Now, I always make sure to pay the pump so I’m not tempted by the glistening junk food. Since it’s gas station food, you usually regret purchasing it five minutes after your first bite anyways.
Alternative to Gambling: Investing
Invest with Betterment. You can literally open an account for $1 (That’s what I did). And, you’re more likely to make money investing than buying a ticket. Instead of going to the gas station and buying $20 in lottery tickets every time you buy gas, put the cash in an investment account.
If you invest $100 a month instead of buying tickets, you invest $1200 a year.
2. Watching TV More Than One Hour a Day
I’m not going to say you shouldn’t watch tv at all. Although we don’t have cable, we try to stream our favorite shows the next day on-demand. Or, we wait for the season to come to DVD to binge-watch. And, I will turn on the tv to watch my favorite football team take the field when they broadcast on a local channel.
But, challenge yourself to not watch tv (or YouTube videos) for more than one hour a day.
Before I got married and became a parent, I loved to watch tv and stream movies on Netflix and Hulu. And, watching any sporting events that were on tv. Then, I had an epiphany…tv and movies have no positive impact on my quality of life. After all, I don’t work in show business or get paid to write movie reviews or episode recaps.
While being able to talk about a movie or show helps make dinner conversation easier with friends and acquaintances, watching tv doesn’t give me a pay raise or promotion. In fact, it probably holds me (and you) back from making more money or focusing on life’s other priorities.
TV Watching Alternatives: Side Hustles and Streaming Plans
If you really need money, use your free time to get a side hustle. Yes, you have to work, but you don’t have to do it forever. Only until you get your finances in order.
Also, when you watch tv or movies, try to watch encouraging content. I recommend Pure Flix for its wide collection of family-friendly and uplifting movies. And, they have some fun tv classics like Dennis the Menace and The Beverly Hillbillies.
Related Article: Read my Pure Flix review to find out more about why I enjoy them so much.
3. Don’t Make Meals at Home
One of the quickest ways to go broke on a limited income is to eat most of your meals at a restaurant. When I was single, I would spend around $30 most days eating out. At home, I’d fry two eggs for breakfast or have a quick bowl of oatmeal. Then, I’d pick out a fast food place for lunch and order off the dollar menu then eat at a sit down restaurant for supper.
If you do that as a married couple or with a family, you can easily spend $30 per meal. Almost overnight, your dining costs double or triple.
Alternative to Going Out to Eat: Cooking Meals for $5 or Less
Now that I’m married, my money priorities changed. Plus, my wife enjoys cooking. Today, my wife cooks most of our meals for $5 or less. Both of our children are still toddlers so they’re not big eaters yet, but when you go from paying $15 in a restaurant per plate to paying $3 for the exact same dish at home, that’s a huge savings.
To cook for $5 or less, buy fresh ingredients and look for meal ideas online (i.e. Pinterest or thrifty cooking blogs).
Another resource I like is $5 Meal Plan. Each week, you receive a new meal plan to feed your family. And, you get a mystery recipe too. It can be a dessert idea or a special drink for instance.
4. Not Knowing How You Spend Your Money
We’ll save the best reason for last. Why? Because it’s important to avoid spending habits that keep people poor.
If you don’t know how you’re spending your money, you might not know what’s keeping you poor. My wife and I go over our spending once or twice a month. It only takes five to ten minutes each time. While we still make some bonehead moves, talking with each other makes sure we don’t overspend for a month.
Alternative to Not Tracking Your Spending: Make a Spending Plan
All of us manage money differently. But, there are two things can all do:
- Know how you spend every dollar
- Make a plan to spend your money better
One of the best free money platforms I’ve come across is Stratus. You can link your bank accounts, debit cards, and loans to Stratus. Then, they quickly show you how much you spend, how you spend it, and how to spend your money more wisely.
If you’re serious about budgeting, investing $84 a year into YNAB (after a one-month free trial) is well worth it. I used YNAB to make a spending plan when after taking a 50% pay cut in 2015.
Two Additional Books You Might Like
If you want to understand managing money better, I encourage these two books.
The Groovy Guide to Financial Independence
If you want to hear the firsthand account from somebody who struggled with money for years and turned his life around, read Mr. Groovy’s Groovy Guide to Financial Independence.
It’s a great book chock full of common sense. I think you’ll truly benefit from it.
Tip: Read my Groovy Book Review to learn more.
Bonus Tip: Unbeknownst to me, Mr. Groovy has written a similar post “The Broken Window Theory” while I was working on this draft. So, I’ve included a link to his post too.
Whatever Happened to Penny Candy?
This book is by another of my favorite authors, Richard Maybury. This book isn’t going to help you to get out of debt like the Groovy Guide to Financial Independence will, but it’ll help you understand the science behind money. And, why inflation exists and how you can rethink the way you view and spend money.
The name of this book is Whatever Happened to Penny Candy?
In my opinion, if our politicians read this book and took the lessons to heart, many of our financial issues would be solved.
What’s Your Take? Did I Miss a Habit? Do You Have Another Solution? Let Us Know Below!