These 7 Money Habits Are Keeping You POOR
Summary
- Recognize habits that are preventing financial success and consciously work to break them.
- Avoid the mentality of sacrificing tomorrow's financial security for today's gratification, which often leads to living paycheck to paycheck.
- Master impulse control to improve financial habits; resist the urge to spend on desires that are not logical.
- Confront the discomfort of checking your bank account; avoiding it only increases anxiety and hinders financial progress.
- Tackle debt head-on; avoid the mindset of ignoring debt, as it can hinder real financial growth.
- Create a personal balance sheet to keep track of liabilities and assets and use it to plan debt repayment and financial decisions.
- Spend money to save time or promote growth; use money to gain experiences or education that would take too long to acquire otherwise.
- Commit a percentage of your income to save before spending; automate transfers into savings to ensure this happens.
- Resist the urge to try looking rich on social media when the reality doesn't match; it's better to work on being financially stable than to put up a false front.
- Move out of your comfort zone in terms of the income you earn; don't settle for complacency but strive for more to have greater impact and fulfillment.
- Surround yourself with people who inspire you to earn and achieve more rather than those who keep you comfortable with where you are currently.
Video
How To Take Action
To improve your money habits, follow these steps:
- Break Bad Habits: Notice any habits that waste money, like buying things you don't need. Stop these actions to save money for the future.
- Control Impulses: Try to say no to things you want but don't need. Practice this until it gets easier to avoid unnecessary spending.
- Check Bank Accounts: Don't be scared to look at your bank account. Check it often so you know how much you have and can plan better.
- Pay Down Debt: Make a list of any money you owe and start paying it back little by little. This helps you use money smarter in the long run.
- Use Money Wisely: Sometimes, spend money on learning or experiences that save you time or help you grow.
- Save Before Spending: Right after you get some money, move some into savings. This way, you always save a bit and it grows over time.
- Be Real on Social Media: Don't try to show off with things you don't have. Be true to yourself and focus on saving and earning more money.
- Grow Your Income: Always look for ways to earn more, and don't get too comfortable with what you make now. Push yourself to do better.
- Choose Inspiring Friends: Spend time with people who motivate you to reach higher and earn more, instead of those who make you feel okay with staying the same.
Follow these steps, and you'll be on your way to managing your money better!
Quotes by Leila Hormozi
"Sacrificing tomorrow for today is a habit that people have in a lot of different areas of their life, it just happens to come out in money"
– Leila Hormozi
"Just because you want something doesn't mean you should do anything about it"
– Leila Hormozi
"Whatever we avoid expands, whatever we confront diminishes"
– Leila Hormozi
"Money is a tool to accumulate education, experience, time, resources that cannot be replenished while money can"
– Leila Hormozi
"People are more concerned with looking rich than actually being rich"
– Leila Hormozi
Full Transcript
account and felt the hang of anxiety in your stomach this video is for you today I want to talk about the seven money habits that are keeping you poor before you ask me Layla what are the beliefs and habits that you have around money you have to first become aware of the beliefs and habits you have that are holding you back so as I list these off what I ask you to do is to write these down and then ask yourself that which of these habits and beliefs do you hold that you need to break the first habit that I see a lot of is sacrificing tomorrow for today this is a habit that people have in a lot of different areas of their life it just happens to come out in money stealing money from future you to give it to present you that's what you're doing over and over again and it creates people living in the cycle of typically paycheck to paycheck because they're constantly spending money from their future self I had a woman in one of my companies she had a terrible habit of buying bags and she had more designer bags than myself and not as much money as me whether she got a raise she got more commissions no matter what happened it didn't trans into her saving more money she actually just bought more bags that's how the brain works you're just going to find more things to spend the money on and so the way you break this is by mastering impulse control okay we're always going to have two sides to our brain there's the logic side and there is the emotional driven impulse side and a lot of people that have bad money habits just have bad impulse control just like if you wanted to lose weight you have to tolerate being hungry tolerate not spending as much money not getting the thing you want not acting upon desire desire does not equate to decisions just because you want something doesn't mean you should do anything about it that is the animalistic part of your brain that has no logical conditioning whatsoever you need to take Massive Action Against it to completely change your behavior you have to do something that is so opposed to your current day behavior that you change your beliefs about yourself because right now the reason you're stuck in the cycle is you don't believe in yourself now the second bad habit that I see with money is avoiding measuring money checking your bank account makes you feel anxious so you avoid it you know where else this is really relevant the scale people don't want to weigh themselves because they don't want to see how much they weigh because it's embarrassing it makes them feel bad there's so much self-judgment that comes with it every time we avoid something we train our brains that it's not safe and because it's not safe the brain labels it it's not safe and wants you to avoid it more and more and more and more until it becomes something that creates a dysfunction in your life when I moved to California and I only had I don't know it was five or seven thousand dollars saved in my bank account I would avoid looking at my bank account because I didn't want to know how much I was spending because I was honestly just nervous that I wasn't going to be able to make ends meet whatever we avoid expands whatever we confront diminishes and so if you want to feel less anxiety about having not a lot of money look at how much money you don't have I'm gonna download mint and I'm going to really track how much I'm spending I need to teach myself it's okay and I'm going to figure it out no matter what the third money habit is ignoring debt people they get paid a bunch of money and they're like I think I'm gonna go buy a house and I'm like Susie I thought you told me you had like twenty thousand dollars in credit card debt she's like oh yeah well you know those payments are over like two years and so she always constantly is ignoring the fact that she still has debt people count it as a positive they're like well I just got paid twenty thousand dollars I'm like no you just got paid zero because you owe twenty thousand now you've got twenty thousand now you're at zero but people don't look at it that way what people want to do is pretend like now they've got all this money and they're avoiding paying off their debt because it makes them uncomfortable makes them feel like they have less money than you do you do have less money than you think you do because you've got this [ __ ] debt over here that you're ignoring the best thing you can do is create a personal balance sheet if you were a company that had debt and you got paid more money you wouldn't be worth more what are your negatives where are you liable what are your positives and then you should look at that every time you get paid and you should learn to allocate a certain amount of your income to then pay down those liabilities they're just gonna grow they're gonna make more money off your interest and this is a personal preference I don't want that [ __ ] on my mind people who have a lot of money and make a lot of money don't keep debt unless it's used as a tool the fourth habit of people who aren't where they want to be financially is that they don't spend money to save time or promote growth two advantages of money that I see is that I can use money to buy time and to buy experience that I don't yet have so when I'm hiring somebody who might be seven hundred thousand dollars a year I'm buying experience that I don't have time to go get now people who don't have a lot of money think differently they think how can I go get that experience so I don't need to spend this money and that's a fundamental shift that has to change money is a tool to accumulate education experience time resources that cannot be replenished while money can well Layla that's easy to say you have a lot of money it doesn't start that way when I had no money I took the first paycheck I had and I bought a four thousand dollar course I could get more money later if I had more experience education but I can't get back time commit a certain percentage of your income to buying back time or buying back education or experience the fifth money habit that I see is spending before they say this one has a very simple solution which is you can put automatic transfers in your account we save a certain amount each month 20 or 30 of your income the day after you get your paycheck you have an automatic transfer that transfers that amount to your savings account that's your oh [ __ ] money this isn't just like oh save up money so you can buy a house one day or some [ __ ] this is so you can have peace of mind so you can make good financial decisions going forward the sixth money habit is trying to look rich when you're not rich this is rampant on social media people that I know that make jack [ __ ] have Lamborghinis and mansions and places they take pictures in front of because they're trying to show off all this money that they don't have because they rented that [ __ ] Lamborghini that's not their house that's their uncle's house and that's not even his [ __ ] girlfriend I know that doesn't have to do with money but probably not people are more concerned with looking Rich than actually being rich I hate the fact that so many people put up this front and then what is behind the wall is it's not actually that much money I actually had somebody that I knew that has this to such an extreme I think had less than ten thousand dollars in his account and wouldn't sell his Bentley the only way to go all in on this is to completely own the fact that you are fearful of Judgment of others it is okay to be afraid but you don't need to act in accordance with the fear I have fear of judgment I don't act upon it you can act despite that fear because courage doesn't even exist without fear the next time that you consider buying something that you can't afford to look like someone that you're not reconsider and ask yourself is that going to get me closer or further from the person I want to be probably further and the seventh money habit is being comfortable with making what you are they make 200 300 000 a year you know they're making good money but then they become comfortable most the people that they surround themselves with are the same way they're okay staying complacent they're okay making the same amount of money they're not trying to strive for more you might actually make more than most of them and so it makes you feel good and like there's nothing more to strive for So I myself have been in this situation many times over and over and what I've done is I've put myself around people who make way more [ __ ] money than me so then I feel like [ __ ] I know that sounds crazy but like I want to feel like I have less money than everyone else because I wanted to see like what are their desires how do they think I know people that have so much money that they can build cities getting around people that think like that is inspiring and so maybe it's not the drive of being able to buy a Lamborghini or a house that's going to keep motivating you but maybe it's the impact you can have on the world if you have a certain amount of money get into that mindset so you cannot stay stuck where you are but understand why it's beneficial to you to continue always striving for more
