Wondering why you are still poor? Asking why is it hard for you to become rich that it seems you are stuck on being poor forever (poorever). Maybe you are not aware of the reasons that keep you poor. Reasons that may not be that obvious but can inflict negatively on your finances.
As a guide, below are the reasons that keep you poor and why you should stop doing it. Evaluate yourself if you are guilty to some of it. It may not directly bring you to where you want to be but definitely it can help you in achieving financial freedom.
16 Reasons That Keep You Poor
1.) Spending more as you earn more
Having more money does not necessarily imply that you should also spend more. Yes, you can raise your standard of living since you also deserve it. Think of it as a price for your hard work.
However, if it comes to the point that at every end of the month, you spend your money on unnecessary stuff then it is not good. Maintaining your spending habits as your income increases helps you to save more. You will be able to achieve your financial goals faster.
2.) Focusing on the present, neglecting the future
Focusing only on your present situation without taking into consideration your future is a sure way to disaster especially when it comes to the financial aspect of your life.
Usually, people believe that the future will take care of itself. Or they do not have to think about it yet since no one knows what the future may bring. They focus on NOW that they neglected TOMORROW.
If you want to become wealthy, you should consider what you want to become in the future. For what you are doing in the present, its result will greatly affect your future. Remember, what and where you are now is the product of your past.
3.) I am still young to start saving
When it comes to saving, there is no requirement, especially about the age limit. It is not like other movies that require a certain age limit to be able to watch it. Not R-13, not R-16 and not R-18. It is rated G, general audience – all ages are admitted.
The younger you start saving money, the more money you will have in the future. Besides, developing it as your habit may take some time. It needs discipline. Do not underestimate the power of compounding interest. So, we can really say that time is indeed gold.
4.) You do not have a budget
Having a budget is really important and is one way of effectively handling your money. Your budget serves as a road map for your money. It gives them direction on where to go for them not to wander.
When you do not have a budget, you will not be able to utilize your money properly. You can easily buy things that are not really necessary and time may come that you will not have enough money left for your important stuff.
5.) Crossing between your needs and wants
Be clear of your needs and wants and put a boundary between the two. Again, the ‘needs’ refer to only things that are essential for you to survive while ‘wants’ are things that you can live without.
But be watchful, sometimes you may think that stuff belongs to your needs but when you assess it carefully it can fall into wants. As a tip, everything that is an upgrade of your needs can befall into wants
6.) Ignores your debt
Imagine that you have a boat and you observed that it has a small leak. But instead of fixing it, you ignore it. As time passes by, the leak will become bigger and bigger. Until such time that is already hard for you to repair and eventually you will sink.
Your boat represents as your finances and the leak as your debt. Not fixing the leak of your boat is the same as ignoring your responsibility to pay your debt. Sooner or later, your debt will become big that eliminating it will really take time. Worst, you will be tied up to it forever.
Ignoring your debt is a dangerous crime that you can commit financially. Your debt will silently sip away your money and it will not stop unless you eliminate it. You should eliminate it as soon as possible otherwise it will impair you financially.
7.) Being trendy
Heard of the latest gadgets on the market? You immediately search for it and eventually you bought it. You always have whats the latest, being always in trend. The worst, there’s always a new model or version that will be available in the market.
Always upgrading your gadgets can really have a negative impact on your finances. Yes, you may become famous for always having what’s the latest one. And definitely you will really look cool and rich. But remember, your aim is not just to look rich but to become truly rich.
8.) Impulsive buying
Are you always purchasing products or services that are unplanned, made just before buying? Then, you belong to an impulsive buyer. According to research, your emotions and your feelings play a vital role that is being triggered by seeing the products by a well-crafted promo.
It is like your weaknesses are being exploited by the marketer and promoters. And when you are not firm, you cannot resist buying their product. So when going to the mall, bring a list of what you are going to buy. And stick to it. The longer you will stay at the mall, the higher the chances of buying things that you do not really need.
And if impulsive buying is one of your weaknesses, then you must do something about it as soon as possible.
9.) Focusing on linear income instead of passive income
Linear income in its common form is salary. It usually refers to the traditional job that trades your time in exchange for money. Passive income, on the other hand, is basically earning money with little to no effort.
Let us use this analogy. Linear income is like using a bucket to fetch water from the well. You have to work otherwise you will not have water to use. You need to fetch water by yourself. On the other hand, passive income is like building a pipeline from the well to your home. At first, it will really take much time and effort. But eventually, when you finished building the pipelines, you do not have to go to the well to fetch for the water. With little effort, you can still have water.
If you are relying on linear income chances are, you will never get rich. And as you get older, you will not have the energy to work anymore.
10.) You do not have the right mindset
You believe that being rich is a privilege. The truth is, it is everyone’s right. Everyone deserves to become one. What separates the rich from the poor is their mindset. And if you want to belong to the one percent, you should recalibrate your thinking.
Poor are more focused on the obstacles while the rich on the solutions. The poor will say “ I cannot afford it!” while the rich “How can I afford it?”. To become rich, you should think like a rich person. This is one of the reasons that keep you poor more that most of us are not wary of.
I recommend reading the book How Rich People Think by Steve Siebold. The book does not directly discuss money but on how to have the right mindset.
11.) Spending more than you earn
Want to know the sure way to become poor? Spend more than you earn. No matter how much you earn every month if you do not know how to properly handle your finances you will always not have enough money.
The best way so that you cannot spend more than you earn is to make a budget. Not just to make a budget but to stick to it. Always spending more than you earn can lead you to your financial death – debt.
12.) Lack of financial goals
Without a financial goal is like having a journey but you do not know where exactly to go. You are just wandering, without following any itinerary.
Having financial goals in life is important. It helps you to have more focus and to do only the things that can help you to achieve your goals. Will keep you on the right track and helps you to overcome the challenges. It also gives you motivation. Imagine how fulfilling it will be if one day you were able to accomplish your goal.
Your financial goals can be categorized into three: 1.) Short term goals, 2.) Mid-term Goals and 3.) Long-term goals
13.) Ignoring that you have a money problem
One of the worst things to do? Ignoring your problem. Your money problem will just stay there forever unless you will do something about it. And ignoring it will only make it worst.
Do not run from it, face it. The sooner you will face your money problem, the earlier you can solve it. Trace why you have that kind of money problem. Determine the root cause and eliminate it.
14.) Working hard, not smart
There is a big difference between working hard and working smart. It does not necessarily mean that if you are hardworking, becoming rich is within your hands already.
There are many workers out there that are really hardworking. They are doing their best to finish their assigned tasks on time. But if you examine them, most of them are still working even they are already old.
The key to become wealthy, not just to work hard but also to work smart.
15.) Afraid to step out of your comfort zone
If you want to be really successful in your financial life, step out from your comfort zone. Yes, it can be frightening. That’s how our mind is design – to protect ourselves from danger.
But if you want to be financially successful, you have to do things that you are not used to. Ask yourself. Are you happy about where you are now? On what you have and experience in life? Or, in your own definition, are you already rich? If not, then you should do things differently. Try a new approach. Step out from your comfort zone.
16.) You are not investing in yourself
Investing in yourself is the most important and the wisest investment of all. For me, it should be your first investment and to be continuously invested on. Of all investments, it is the only one that you will definitely have profit.
The common thing among the rich people? They are continuously investing in themselves. Many successful people never stop learning. They are voracious readers. By increasing their knowledge, they can easily spot an opportunity that can be turned into money. There are many sources available to become financially literate.
Final Word
By not doing the mentioned reasons that keep you poor does not guarantee you will become rich. However, doing those things guarantee that you will stay poor. The road to becoming wealthy is a long process and it has many factors.
On the above-mentioned reasons that keep you poor, which of them are you guilty of? And how you corrected it? Share it in the comment section below.