Bad Money Habits That are Making You Poor - Common Sense Living Newsletter
Common Sense Living India

Bad Money Habits That are Making You Poor

Feb 17, 2015


"When I was younger I used to think money was the most important thing on earth. Now that I am older, I know that it is."

Unlike Oscar Wilde, when I was younger I didn't think money was important at all. Now that I am older, I still don't think it's the most important thing, but I have learned that the lack of money can be a serious impediment to living the best possible life.

As I've set out on a journey to understand money, and set my financial habits in order, I look around and see that I am not the only one suffering from a lack of basic money-management skills.

Below are ten awful money habits I see in people, but luckily they are ones that can be easily fixed.

  1. Leaving your money in one account - and then wondering why the number gets smaller and smaller. If you can see it, you can spend it. Put a percentage away in a savings account and label it [unavailable]. Your savings are like jalebis for diabetics - not to touch - ever (except in case of sweet tooth emergencies or weddings). In fact, it's best to have multiple accounts depending on the various goals you are saving for - retirement, children's education, emergency fund, etc.

  2. Thinking I'll save whatever is left after my expenses. Such an obviously bad idea. We all know what the end of the month looks like - no matter how much you start with you will be left with a few paise or nothing at all. Either way, it will be much less than you should be saving. Pay yourself first - wise money mongers say. That doesn't mean go shopping on payday. That means put money away first in your savings account. (Then go shopping... but only if the sales are on).

    Good Money Habits for Financial Peace
    Source: Boryana Manzurova/Shutterstock

  3. Not planning ahead... and not using your superpower - budgeting. If you think, 'but I need this now', and hit the stores between sales, especially for essentials, that's a bad habit. You can deal with emergencies as they come, you can shell out for leaky roofs, and a replacement for your favourite shoes wearing out without warning. But if you are running out of basics, that means you haven't planned ahead, bought in bulk, or stocked up during the sales. Sale season has become a big thing in India - and you can make significant savings if you have the patience and foresight to budget and plan properly.

    Your budget reveals your life in the starkest way possible - through numbers. The US Vice President Joe Biden once said, 'Don't tell me what you value. Show me your budget and I'll tell you what you value.' He was probably talking about his nation's budget but it applies to your budget too.

  4. 'Just this one time'-not planning for splurges. Thinking that just this one time I will buy [something non-essential] impulsively is a bad habit. Being impulsive sometimes and splurging is fine - but not too impulsively. You should budget for your impulses, frivolities, and moodiness as well. Have a discretionary fund - if you know yourself and your family, you will know how much that should be - if you don't know yourself track your expenses closely for a while to get a sense of what to put aside for.

  5. Saying yes every time they ask. When your kids ask for things do you have trouble saying no? Truth is, most of the time you can say no and get away with it. Reward them sometimes, make sure they have what they need, but you don't have to pamper them with 'stuff'. In fact, for their own sakes please don't pamper them with stuff. It doesn't matter if their eyes water and lips quiver and they wheedle, 'But pleeease I waaaant it.' Give them hugs and say 'but beta you don't need it'. And if they are older, they can save up for the things they want. Would you rather give them that useless thing now or that prestigious education they will value forever?

  6. Staying away from stocks. If you think investing in stocks is a) risky b) complicated c) a scam d) not for you. All of the above are untrue. You can invest in safe long-term stocks, it is easy enough to learn and figure out for yourself with a little research, there are opportunities for everybody no matter how old you are as long as you plan well, and you can control the entire process with online demat accounts so as not to be scammed by brokers or whatever else you might be worried about. 

  7. Putting everything in stocks. Asset allocation is important at every stage of financial planning. If you are very young, in your twenties, say, you would be okay putting all your savings in stocks (leaving a little emergency funding aside) because you have a lifetime to plan. As you get older you want to make sure you have some funds in low-risk stocks, in debt, gold, real estate, etc. This way you always have access to money. And as you get older and the market changes you should redistribute your wealth to maintain the optimal balance for yourself. As extraordinary playwright Tennessee Williams said, 'You can be young without money, but you can't be old without money'.

  8. Dipping into your emergency fund for non-emergencies. This is a big no no. An emergency fund is for emergencies. Losing your job. Breaking your hip. Hike in college fees. Not for fancier weddings or bigger cars. Don't get carried away with societal pressure to display wealth. If you do, it will hurt you when a real emergency arises. It is not your responsibility to care what anyone thinks about your family's wealth. As Gandhiji says about what other people think: "I will not let anyone walk through my mind with their dirty feet." Or in this case their unwanted, uncalled for and uninvited judgments. Focus on your needs, not your vanity.

  9. Leaving it up to someone else. No financial advisor can really understand you. Your habits, your mindset, how you work, how your family works... They can advise you what to do but they cannot tailor a financial plan that would fit you as well as your own planning will. Get advice certainly, but don't leave it up to anyone else. Your money, your future, deserves your attention.  

  10. Not discussing money with your family. Your partner and children are as much a part of your financial planning as you. If you discuss your financial planning efforts with them, they will be informed properly and know what to do in case they lose you. They will also start learning about money early and not make the same money mistakes you might have when you were young. 

    I am sure you already know or do most of the things I've listed above, but honestly the one most important thing I am hoping you will pick up here is the last point, being open about money in your home.

    There is a definite stigma around talking about money - it seems ostentatious, like bragging. But discussing it with your kin is important. There is a lack of financial literacy in our education system, so you are the primary source of good financial understanding and example for your children.

    And if you need support, by all means, get it. This is one area where pride really could just land you in a hot spot. Money is important enough that it can make or break a life - and if you have to make some decisions sometimes that don't look or sound good to the rest of the world, so be it. 

    The Wealth Builders Club, as you know, is one place where individuals trying to adopt the right attitude toward wealth are working together to achieve not just financial freedom, but financial peace. If that's the kind of peace you are looking for, know that we are here for you. 


We request your view! Post a comment on "Bad Money Habits That are Making You Poor". Click here!

22 Responses to "Bad Money Habits That are Making You Poor"

mv reddy

25 May, 2016

Thank U


15 May, 2016



25 Aug, 2015

some thing


26 Jul, 2015

Very good article.. Thank you.


07 Jul, 2015

yes it verymuch effect on your health and wealth.

Sunu Mathew

02 Jul, 2015

Wealth Management should be taught to our children at a very young age; say 12 years ON. We should open a bank account for them and ask them to manage the same. Depositing the money, with-drawls, keeping certain portion into FD, recurring deposit etc. Money you have to supply but channelling should be done by your kid - I mean execution.


02 Jul, 2015

Anisha it is reality whatever you pass the comment regarding Bad money habits .thanks for this

sunder raj

27 Feb, 2015

nice be shared

Colombowala Zulkef

20 Feb, 2015

As per my experiance the point No. should be reversed. Real estate investment in young age & stock investment in older age,

Like (1)


19 Feb, 2015

Good one.


19 Feb, 2015

Indeed , identification or discovery of one or more such habits will be a good case of self evaluation on financial side ! In particular, habits 8 & 10 are indeed alarming !!

Like (1)


19 Feb, 2015

I wish I was very much younger, when this article was out !!!

Dr C M Sharma

19 Feb, 2015

As rightly mentioned I too follow others advice to invest/ save money. I wish to be a member of the group(s) like wealth builders club to start with.Please advise. Thanks.

samir shah

19 Feb, 2015

Amazing write up . People generally dont share about money with their kin , eventually end up in a mess when some untowards occassion arises . This days essential items (food /medicine)are getting costlier than the luxury(TV/Mobile) Good article , please keep posted . Wish all a Nice reading and happy investing for the future

Like (1)


18 Feb, 2015

One of the best articles I have ever read as it seems that is applying to me and and to my famlly

Like (1)


18 Feb, 2015

Respected Anisha Very true and having experienced few of them, it is most appropriate that young members read the article twice and do soul searching. Money is not everything and indeed in Everything you don't need money.

CK Swarnkar

18 Feb, 2015

Anisa , Thanks for a good article , Many person will take benefit of this.


17 Feb, 2015

A very good illustration , particularly for those are in the initial stage of financial planning


17 Feb, 2015

Dear Sirs/Madam Respectfully I submit that the article on "Bad Money Habits That are Making You Poor" seems to be posted for me only.Because, I never thought of earning and saving money for my old age or for my kin & kith. Thank U very much at least at the age of 60,I will be forced to implement the guidelines.

Like (1)

A R Mahendra

17 Feb, 2015

In all your advice on money matters, you MUST factor in AGE. Otherwise it will not carry much meaning for everyone.


17 Feb, 2015

In my opinion, it is an excellent article which is useful to one and all. Especially last point is very important and every family head has to share the information about the assets and liabilities with the family members especially wife and children so that if something unfortunate happens, family members will have a clear picture of how to go ahead further. Money management is definitely very important.

Like (1)


17 Feb, 2015

Good piece of advise on money management It is very essential to set aside the money for investment in the first instant.You have to decide how much you want tobsave every month and that will be the fist part you transfer from your salary account

Like (1)

Sign up for a wealth of Common Sense Living ideas delivered to your Inbox for free every week.