Have you ever questioned where your money went?
Do you live paycheque-to-paycheque?
No matter what your income, good money habits can help to build wealth and set you up for financial success… but bad money habits can do the opposite.
Bad money habits can see you dwindle your savings (if you have any) by continuously spending more than you earn.
These might even be habits that you don’t even realise, yet are detrimental to your financial success.
Well, here are 10 money habits that can be eating away at your hard-earned money and keeping you poor, and how to overcome them.
1. Not having (and living to) a budget
No matter what your income, having a realistic and well-planned budget is key to financial planning and success.
Without a budget, your spending can get out of control (think impulse purchases) and leave you questioning where all your funds went at the end of the month.
So make a budget, and stick to it!
2. Relying too heavily on credit
Racking up credit card debt or taking out a payday loan is an easy way to splash out on the flashy item you’ve always wanted… but the reality is, if you need credit to buy it, you can’t afford it.
Racking up credit card debt is one of the most expensive bad-money habits you can have.
Not only can high interest rates make the debt almost impossible to pay off, but high balances on your credit card, especially if you miss a payment, can damage your credit score.
So avoid throwing money down the drain and pay off your credit card balance in full every month to avoid the fees, and if you can’t do that, perhaps get rid of it altogether.
3. Not keeping a record of your money
This ties in with the concept of budgeting.
If you don’t know where your money goes how much your bills are, and who they are payable to, how can you possibly keep on top of your finances?
The reality is, that many are aware of their major expenditures, but the smaller ones slip through the cracks and end up eating away at our finances.
By keeping track of your finances and writing down exactly how much you need to pay, and to who can help you budget for the rest.
Also, keeping a close eye on your money ensures that if there is fraudulent activity on your account, it's identified and dealt with straight away.
4. Prioritising the wrong things
Saving money and building wealth doesn’t come without a few sacrifices.
Want to buy an investment property, upgrade your home or take a holiday?
Perhaps you need to cut back on some of life’s unnecessary guilty pleasures.
We’ve all heard it before, but making a coffee at home every day instead of buying takeout can save you a fortune.
It’s a small change but prioritising your home renovation over your daily coffee can make that dream home goal come along faster and more easily.
Not only do you need to be clear about your goals and priorities, but they also need to be regularly reviewed.
5. Ignoring your debt
The only thing worse than racking up unnecessary and expensive debt is ignoring it altogether when it comes time to pay it off.
Worryingly, when the financial woes become too overwhelming and the debt spiral kicks off, many people stick their heads in the sand and ignore that spiral worsening.
It’s a vicious cycle and could leave you with nothing.
Instead, consider consolidating your debt and paying off an achievable amount regularly.
Getting on top of your debt before it gets on top of you is the only way to avoid losing it all.
6. Poor shopping etiquette
Spending more to save more?
- Also read:Melbourne property market forecast for 2025 | Is it a good time to invest in Melbourne?
- Also read:Latest property price forecasts for 2025 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Brisbane Property Market Forecast [2025] – What’s Ahead & Where to Invest
- Also read:Sydney property market forecast for 2025. Is it a good time to invest in Sydney?
- Also read:This week’s Australian Property Market Update – Latest Data, State by State June 24th 2025
Shopping when bored or (for food) when hungry?
Relying on retail therapy?
Spending to keep up with the latest trends (such as buying a new iPhone at every release)?
Not shopping around for a better deal?
All these are bad shopping habits that will see you spend more than you need to - setting a budget and sticking to it will help you here.
7. Not putting money into savings
The difference between poor people and self-made millionaires is that the latter make a habit of saving regularly.
After all, the more you can save at an early age, the more wealth you’ll accumulate.
So whether you’re saving a rainy day fund, for retirement or for a big ticket item, it needs to start today.
After you’ve set a budget and begun to track your spending each month, you should start to put money away each month towards an emergency fund.
Most financial experts recommend that you save between three and six months' worth of expenses in an emergency fund so that you have something to fall back on should an unexpected bill pop up.
Once you’ve established a budget and stashed away some money for an emergency fund, your next focus should be saving for retirement.
Whether that is salary sacrifice, paying off your mortgage early or investing in property, the long-term goal should be how you plan to pay for your retirement when the time comes.
8. Not investing
Saving a pot of money is one thing, but if you don’t invest it, it will only get you so far.
Many millionaires started out poor and did not have large incomes during their lives, so saving was a habit they adopted while they were still poor.
They then invested their savings, as well as the investment income generated by their savings.
After many years, their savings and investments compounded, eventually turning them into self-made millionaires.
It’s clear that to grow your money and build real wealth, you need to start investing as the right investment can increase your income and set you up with financial security.
9. Living beyond your means
It’s a simple bad money habit, and also one that many of us do.
If you’ve sat down and worked out a budget, put money for bills and general living costs aside and don’t have anything left for food, you’re living way beyond your means.
Or maybe you live paycheck-to-paycheck, live off credit, continually exceed your budget, and buy impulsively or daily to save?
Or all of them?
You’re spending more than you earn.
Living beyond your means immediately puts your finances at risk by increasing debt, not having enough for bills, and not being able to save any money.
This is a fast-track way to being or staying, poor.
10. Spending more as your income increases
It can be tempting to hike up the budget, or even throw it out the window altogether, when your pay goes up, especially if it's a substantial increase to your income.
Sure, there is no harm in raising your standard of living when you can or treating yourself once in a while, but constantly raising your budget and spending can see you run out of money just as fast, even if your income has risen along with it.
It’s important to keep expenses and spending at a constant level while looking for ways to increase your income or gain a passive income to help boost your overall wealth.
Note: Financial success means different things to different people.
It might mean achieving millionaire status, owning your own home, or even living debt-free.
The trick to financial success is being able to manage your money… and that’s where your good or bad habits can play a vital role.
The lesson from all this is to spend less than you earn, save the difference and when you have sufficient savings, start investing.
