7 Expensive Habits That Will Keep You Poor | How To Be Good With Your Money #Best Education Page #Online Earning

Have you ever checked your bank balance and wondered where all your money went

if this sounds like you then more likely than not you were practicing money

habits that will keep you poor forever therefore in this video I will share

with you seven expensive habits that will keep you poor forever and if you're

new to the channel then hit the subscribe button below for more

life-changing content hop in number one spending more than you

make let's face it spending money is fun in fact there is scientific evidence to

support this phenomenon when you're considering buying something your brain

releases dopamine dopamine is a chemical produced by our brains that plays a

starring role in motivating behavior it gets really soon we take a bite of

food when we have sex after we exercise and when we spend money in an

evolutionary context it rewards us for beneficial behaviors and motivates us to

repeat them this is why humans have such a hard time resisting spending and often

the spending is only curbed when all funds have been depleted and credit

cards have been maxed out however when people come into money this problem

perpetuates maybe you got a bonus at work or maybe you got a promotion these

increases income trigger our inclination to spend as we continue to chase that

dopamine high but it's not just the dopamine high that makes us open our

wallets and spend we also feel an intense need to fit in with our peers

and one way we can maintain our social status in society is by having the

nicest clothes or the newest car unfortunately this incessant spending is

keeping you broke you see if spend every dollar you make you will never be able

to save money invest or retire what separates the rich from the poor is the

management of their money whereas the majority of people spend every new

dollar they earn the rich maintain their modest lifestyles as their incomes rise

this allows them to begin saving more and more money as a cash flow increases

but the rich don't just hoard this money they then deploy this money into

investments like Roth IRAs mutual funds investment properties or their own

business to allowed this cos to grow further therefore if you want to become

wealthy then you must avoid spending more as your income Rises haba number

two sacrificing future happiness for present pleasure there are two types of

people in this world those who live for today and those who build for Tamar

and unfortunately the majority of people fall into the first category now don't

get me wrong enjoying the present is very important because no one knows how

long each of us have to live but more likely than not you will make it to

tomorrow and if you are always trading future rewards for present pleasure then

you will never be rich this trade-off is actually one of the big differentiators

between the rich and the poor when the rich make more money they forego the

desire to spend the money today and instead sock it away into savings and

investments that grow in value and provide financial resources that can be

used in the future to maintain their current standard of living in financial

terms delaying gratification is known as delay discounting and it takes place

when someone decides to discount the value of future rewards to immediately

gratify themselves even though accepting a lesser reward isn't exactly rational

the rich know that future payoffs will be greater than present rewards and

studies strongly support how this restraint from present gratification can

lead to larger income realizations in the future in a study of over 2,500

people participants were asked whether they would hypothetically accept a

smaller sum of money $500 USD or a larger sum $1,000 USD after a delay

which could be one day one week one month six months or a year when the

researchers use machine learning algorithms to model the relationship

between individuals tendency for delay discounting and the other self-reported

variables they found that delay discounting was more predictive of

income than age ethnicity race and height therefore if you truly want to

become rich then you must take the future into perspective whenever you're

making financial decisions although it is good to take care of everything in

the present do your best to save for your future hobbit number three you

think you're too young to worry about saving let's be real when we're young

our primary focus is to look cool and fit in with those around us to do this

we buy the newest clothes and the latest gadgets to feel like we are part of the

in-crowd we are much more worried about our social status than saving for a

house or for a retirement this carefree attitude leads us to spending every

penny we earned leaving little to support us down the road in reality you

were never too young to start saving and just as importantly in

sting take Warren Buffett for example he bought his first stock at age 11 and

over the course of numerous decades has leveraged his mastery and investing to

become one of the richest men in the world let's use an example to illustrate

just how important it is to get serious about your finances from an early age

say we have two people Mike and Steve Mike begins investing at age 19

investing two thousand dollars a year at 12 percent for just eight years meaning

that his lost investment is at age 26 Steve on the other hand waits until he's

27 to start investing and invest two thousand dollars a year at twelve

percent until age 65 who do you think will end up with more money at age 65

well Steve seems like the logical choice because he invested for 39 years

compared to Mike's eight years Mike actually ends up with an extra seven

hundred thousand dollars of received because of when he started investing so

as this example proves it is never too early to start saving and more

importantly investing your money habit number four not tracking your spending

we all think we know where our money comes from and where it ends up sadly

that's not true for most of us we might be aware of our major expenditures like

buying a car or getting a new phone but the small things usually it up or

finance is more than the big ones for instance when I used to not track my

expenses more often than not I would open up my credit card statement at

Monson and be completely shocked by how much bigger my bill was than I

anticipated the truth is that all the nights out

coffees and clothes I was buying was adding up to much more than a large

expenditure would every month was squandered any chance I had at saving

money it was only once it came across a quote by Peter Drucker what is a

measured isn't managed that I knew that I had to change my ways and started

tracking my expenses being the lazy person that I am I avoided setting up

complicated apps or programs and simply began writing down all my purchases in

my iphone notes this simple yet effective strategy allowed me to see

exactly where my money was going and I still use this technique to this day

however the strategy didn't solve all my money issues because while I was

tracking my expenditures I still found myself overspending which leads us to

habit number five habit number five lack of budget

now maybe you are already tracking your spending if so great but if you don't

spend according to a plan then you may still find yourself in financial trouble

you see you could be tracking the fact that you are spending hundreds of

dollars on drinks and clothes every month causing you to rack up a

significant amount of credit card debt which will leave you in as much trouble

as if you weren't tracking at all this is where a budget comes in and one of

the best ways to budget is by using the twenty thirty fifty method this

budgeting technique works by dividing your income in the following three ways

fifty percent is designated to living expenses like rent utilities and

groceries the next thirty percent goes towards entertainment costs like going

out to eat or seeing a movie the final twenty percent is meant to go right into

your savings account this means that you can now track your expenses according to

the amounts you've designated at the start of each month ensuring that your

money goals are achieved habit number six ignoring your debt as a June 2019

Americans are in more than 500 billion dollars worth of credit card debt with

the average household having a balance of almost $7,000 on their cards this

insane amount of debt doesn't even factor an auto loans student debt and

the largest debt mortgages in short the United States has a dead issue and part

of this problem is that debt has gotten out of hand for so many people that the

only way they can cope with this financial struggle is by ignoring it in

fact the issues gotten so bad that 10% of Americans say that they don't even

think they will ever be free of credit card debt so how has this issue

propagated to this extreme debt has become an issue in Western culture for a

few reasons firstly most people are unaware of the almost infinite ways

there are to make money meaning that their income is limited to what their

employer will pay them which more often than not is not a lot second people are

in a constant struggle to compete with their peers in order to feel a sense of

social validation which they do through spending which has been perpetuated by

the rise in social media finally dead operates in a vicious cycle

when debt isn't paid off interest charges are added to the already

insurmountable balance meaning that the debt grows bigger and bigger over time

when this happens people begin to ignore their debt completely

which is cause the United States to have more than 13 trillion dollars worth the

data withstanding so if you want to avoid this bad habit then make paying

your debt a top of the list item on your agenda work out a plan for this and

stick to it no matter what habit number seven

constantly upgrading your electronic gadgets it seems like every year

technology companies released new phones computers and tablets making the ones we

currently have even more obsolete than they already were

well the newest guy just rarely have any significant differences in their

functionalities these companies know that on a psychological level as humans

are wired to want the latest electronics but not because of their functions but

because of the social status that they can offer us for instance every year

Apple comes out with at least one new version of the iPhone and while some

years the changes between models are significant most years they aren't but

what does change is the fact that you no longer have the newest model iPhone

which leaves you as a social outcast if the rest of your social circle decides

to upgrade their phones and this phenomenon is pervasive amongst every

material item in the world like clothes and of course carbs

besides these upgrades being rather irrational they erode our ability to

save money upgrading your phone can easily cost a couple hundred dollars

which could be put to much better use if it was saved

or better yet invested in short it's okay to not have the newest gadgets and

if you aren't accepted by your peers because of it then you're probably not

hanging around with the right people anyway so when you feel the urge to

upgrade your electronics coming on take a page out of William Shatner's playbook

when he says if saving money is wrong then I don't want to be right thanks for

watching if you want to go from the life you have to the life you deserve then

hit the subscribe button now

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