6 Views About Money That Make You Poor

According to experts from the financial and investment services company Bankrate (USA), there are 6 wrong money views that prevent a person from escaping personal financial troubles.

Thinking that saving money is hurting yourself

Stemming from the competition with other people's flashy lives, many people feel that "making money means enjoying it" and most of the money they make each month is spent on cosmetics, clothes, food, drinks and travel.

Money then appears in the form of unused lipstick, unworn clothes, unhealthy snacks. Many people think that this is a sign of a good life, however, at the end of the month, your pockets are empty.

According to Bankrate's 2023 emergency fund report, 57% of American adults are not enthusiastic about putting money into emergency savings.

Feel like saving a small amount is useless

The trend of "lying straight" is very popular among young people, emphasizing the comfort of the present, like lying straight, ignoring everything. This is a common mentality of many people, most of whom think that saving only a small amount of money each month, not knowing when they will be able to buy a large asset, leading to a lazy mentality of saving.

Remember, all big money starts small. Only by saving small amounts of money will you have more options in the future, such as investing. As you build up your savings and find the right investment method, you will start to see your money grow faster.

Income increases, spending should also increase

When you earn 10 million, you spend 7 million, save 3 million. When you earn 20 million, you spend 18 million, you only save 2 million, which means your income increases, your expenses increase and your savings decrease. In the end, the amount of savings does not increase at all but you feel the burden of your life is even greater.

To avoid this, financial experts say you need to have a specific budget plan. When planning your budget, make sure to take into account your wants, needs, and savings. According to the 50/30/20 rule, a popular budgeting tactic, 50% of your income should go to needs, 30% to wants, and 20% to savings.

Spend money on impulse

Stemming from the mentality of "it's just a small amount, no need to budget, just withdraw and spend until it's gone, save whatever's left", many people have difficulty having a fixed amount to spend each month.

The right way to save money is to deduct the amount you want to save first, then spend the rest. Setting goals and automating your savings deductions can help improve your sense of leakage and reduce uncontrolled spending.

Always find an excuse to spend money

A typical example of this habit is trying to keep up with your friends’ lifestyles and going on expensive outings. When you constantly compare yourself to others and try to emulate their lifestyles, you may end up overspending and making financial decisions that are not in your best interest.

This way of thinking can lead to a vicious cycle of trying to keep up appearances and struggling to maintain a lifestyle you can’t afford. Instead of trying to impress others, focus on living within your means and making decisions that align with your personal financial goals.

Believe that "you have to spend to earn"

With the view that you have to spend to earn, and spend money to change yourself, many people are willing to spend money without thinking. For example, when you see a successful person wearing an expensive bag, you think you should buy that bag, thinking that you will also be rich and successful.

This is a completely wrong way of thinking. This way of thinking will make you poorer, the money you have will decrease more and more. Limited understanding of personal finance can hinder your ability to make wise decisions, causing you to be stuck in a cycle of financial hardship.

Each person's financial freedom is heavily influenced by their own habits. Therefore, recognizing these habits is the first step to reshaping your financial situation and turning it around accordingly.