Have you ever sworn to never exhibit a toxic or bad habit, only to find yourself doing exactly that? A great example might be the things you learnt from your parents that you swore you’ll never do. Like screaming over the phone when the person on the other end can hear perfectly if you took it down a notch or something more serious like not breaking bad money habits – the same kind that led to some parents working for years and not properly planning for retirement.
We form habits in different ways and they shape our lives either for good or bad. Therefore, if you’re trying to improve your finances, you need to be deliberate about breaking bad money habits and replacing them with good ones.
Below, I share bad money habits you need to stop ASAP, as well as a few good habits you can imbibe to help you reach your financial goals faster.
Stop these bad money habits 🌚
- Not preparing for an emergency
- Spending more than you earn
- Waiting till you have more money to save or invest
- Relying on loans to pay your bills
- Not taking control of your income streams
- Constantly blaming others for your mistakes
- Hoarding money
- Saving without a goal
- Dipping into your savings
1. Not preparing for an emergency
Your emergency fund is frankly a great place to start your savings plan. We all know that unexpected things happen all the time – like Covid 19 🙄 – which cost people their jobs and led to salary slashes for many others. So the best way to stay financially secure is to save up for emergencies.
This fund should cover at least three to six months of your monthly expenses, nothing less. For example, if it costs N150,000 to cover your expenses for one month, you should have at least N450,000 – N900,000 in your Emergency Fund. Not having an emergency fund means you will usually need external help or loans whenever you run into money challenges.
2. Spending as much as you earn or spending more than you earn
If you’re spending as much as, or more than you earn, this means you’re living paycheck to paycheck with no proper plan for the future. This lifestyle makes it nearly impossible to build up significant savings or wealth over the long term. Granted, your income might actually not be much right now, but spending every single penny is still considered a bad money habit. Do not spend as much as you earn on expenses – or worse – spend more than you earn by living an expensive lifestyle. Cut down on expenses so that you can at least have money stored up.
3. Waiting till you “have more money” to save or invest
You know the way they say “If you don’t learn to give N100, you would never be able to give N100,000”; it’s the same with saving and investing. Do not wait to “have more” before you start saving and investing because these two grow over time thanks to the power of compound interest. Thankfully, you don’t need to be a finance expert to start, you can simply use Cowrywise to begin your short and long-term savings and investment plans.
4. Relying on loans to pay your bills
This is closely linked to people who spend more than they earn. It is crucial to live within your means because not doing so will lead to you relying on loans to pay your bills. It must be frustrating to have to borrow every month to cover expenses. To eliminate this, you should drastically cut down on expenses, and strategically work to increase your pay or devise legitimate means to increase your income.
5. Not taking control of your income streams
So many people are still “winging it” when it comes to earning consistent income where this month is a hit and next month might be a miss. Instead of living like this – where monthly income is never sure, get a job that stays true to paying you every month or build a business that is sure to pay you monthly. With business, the amount you make might vary, but at least make something! The whole idea of being in business is to get revenue and make a profit, but if that’s not happening right now, you should consider using your skills to get a job that brings you consistent income. You can then transition into a full-time entrepreneur.
6. Constantly blaming others for your mistakes
A person who can take full responsibility for their actions is one who is considered mature. We all make mistakes but what differentiates people who learn and people who don’t is responsibility. You may have made bad money moves in the past or might currently be facing the consequence of one. Instead of passing the blame to someone else with thoughts like “it was my parents who refused to teach me about financial freedom”, or “it was my silly friend who introduced me to this Ponzi scheme”… Take responsibility and retrace your steps.
Your parents indeed could have taught you to imbibe the right money habits, but if they didn’t – forgive them. Take the steps needed to progress and ensure you teach your own children about money. Your friend who told you about the Ponzi scheme – it worked because you also did not do due diligence. If you had thoroughly researched, you would have found out that most firms that promise to “double” your money in such a short time are scams.
7. Hoarding money
The mindset that you need to hold on tight to money for dear life speaks of desperation. Nothing says that hoarding money will make you richer. Build a mindset that says “money does not control me, I control what to do with money”. Be a giver, set money aside for leisure, and give (no matter how little) to causes that matter to you. These are just a few ways to feel more fulfilled.
8. Saving without a goal
Oftentimes, money kept without a goal in mind is easily spent. If you want to keep more of your savings, you need to have a clear goal and then set up a plan in order to achieve it. Start by determining the major milestones you hope to achieve in the future, like having a home, a car or paying for education for your kids. Next, determine how much you need to save and for how long. Finally, set up a recurring automatic transfer from your bank account to your savings/investment plans on Cowrywise to ensure you stay consistent with your savings.
9. Dipping into your savings
A tree cannot grow if it’s not watered, and you can’t grow wealth if you keep dipping into your savings. Not having the discipline to save will adversely affect your plan to build wealth. Once you set up savings towards a goal, keep your hands off of the savings till you achieve your goal. Rinse and repeat. To keep you guided, you can create 3, 6, 9 or 12 months goals or more. That way you can focus and achieve a lot more than you imagined.
Bad money habits set you up for failure
There’s no nice way to put this but continuing with bad money habits will eventually lead to tears. Let’s say you’ve had a goal to set up your emergency fund for years but never have, then you must have been burnt by this decision in the past. This is because life happens and when it does, unexpected funds will be spent.
That’s why not setting up your emergency fund, not living within your budget or continually paying your bills using loans will leave you financially vulnerable and can set you up for failure. 😢
Do these to reach your financial goals faster
Here are good money habits you should begin to imbibe right now.
- Start and maintain an Emergency Fund
- Create and stick to a budget
- Document your daily/weekly/monthly expenses so you can measure and tweak your money leaks
- Pay yourself first by saving a portion of your income every month or every week (depending on how you earn)
- Save to invest, do not save to spend 🌚
- Start and stick to your savings and investment plans
- Pay off all your debt
- Diversify your investment portfolio between low, medium and high risk
Breaking bad habits and cultivating new ones cannot happen in a flash. However, with discipline and the right information, you can begin to adjust and imbibe better money habits that will lead to financial success.
Want to begin your journey to financial freedom? Start here.
Are there other bad money habits you think people need to stop? Please share in the comments.
You never know who you’ll be helping!
Hello Ope…thanks for your writings…can you come talk to a group on WhatsApp?
I learnt a lot from this. I will put this points into practice soon…
Awesome! Thanks for reading.👏🏽
This is an apt reminder. Thank you
It was nice write up I learnt alot okay
Great to hear!
This write-up is good for the week. We meeeuv!!!!
This message is a timely one for me, even though I’ve begun practising a few of the aforementioned tips.
It’s a great way to begin the week and it comes at the right time as end of the month approaches.
It’s always a delight to receive an email from my favorite financial adviser, Ope, because she always has something relevant, thought provoking and practical to say and offer about my (your) finances.
Truth be told my financial education and wellbeing has improved ever since I joined Cowrywise. Thanks to Ope with her gentle forcefulness. Lol. I am now more savings, budget and investment oriented. Only regret is why I didn’t come across Cowrywise sooner. Where have you been all my life??
I still have a long way to go to make up for lost time but, baby steps.
Uwésè (Thank you in Bini)
Baby steps can lead to much progress!👏🏽
Why are you so sure that Ope is female though?🌚
You’re welcome GOC.😊
But, I can bet Ope is a female.
I relate so much to your talks. If I’m not learning something new, I’m realizing I’m not the only one who thinks this way 😌💖
Pls want logging into my Cowrywise
Is not going mam/sir
Pls help out
You can afford it doesn’t mean you should buy it, is it really necessary? Think!
Spending a huge chunk of money on liabilities.
This is a major bad money habit too.
Thanks for sharing it, Ajayi.
Thank you. This is really helpful
Thank you, Ope.
10. Don’t compare yourself with other people.
People often spend money on what is not needed trying to please friends, family and colleagues. To cultivate a good saving habit you have to start living your life as a self-life, not public life. If you don’t have it now does mean you will never have it. Life na turn by turn, go through life at your own pace. Life is sweeter when don’t live to please anybody.
“Life is sweeter when don’t live to please anybody.”
This point on comparing one’s self is such a good point. Thanks for sharing it.
Please I didn’t not received my referred bonus payment to my stash while other people have received their own what is the problems please
This is copacetic.
How do we hack black tax?
This blog post on Black Tax might help – https://cowrywise.com/blog/black-tax/
Thanks for golden , professional advice. How can l go about Halal investment plan
Candidly, no 6 is on point. Spending errors are stringent but not in the real sense of it. One is guilty of that. I learnt from all 9 points. Kudos
This is so apt! Ope, you need to address how we can say NO (and not feel quilty) to family issues that are springing up. They are the cause of my savings depleting. *sobs*. Thank you for sharing this. Always love to read from you.
Gloria shares how locking up her savings helps her say no without feeling guilty in this article – https://cowrywise.com/blog/chose-cowrywise/
This article on Black Tax might also help – https://cowrywise.com/blog/black-tax/
I hope both help!
Thanks for the education Ope.
You’re welcome, Marv Annie.
This is really the message for the now.
We need to imbibe the culture of savings and inculcate it into our children at a very tender age if possible include the culture into our value system even in our school curriculum.
Very timely piece.
This is informative
I’ve learnt a lot. Thanks and keep it up.
I needed to be reminded of this very important truth. Thanks alot
Thanks alot Ope, good one.
How can I see my deposit
You can see all your Savings/Investment or Stash funds when you log into your Cowrywise profile.
Which specific deposit are you referring to, please?
Thanks for this insight it is a good one and i know it will help me because I have struggle alot on how how to to gain financial freedom.
I appreciate this great information and financial education. It has given me insight into my financial plan. thanks.
This piece will be really helpful. Thank you for sharing Ope
Truth be told,i saw one of my bussiness partner using this app for saving money and I be like WTF am app is this, he then explain to me And I be like wow🥺then I started using the app, I won’t lie here, my financial life changed immediately for good,how can I thank cowrywise,
Thanks to the organizers🙇♀🙇♀
Yeah ope…..that investment part about buying point (ARM Or so)….ion understand….pls could you put me through
Thanks for the charge
This is very great, insightful and helpful.The lessons were very instructive and many salient points to note.Please is there a WhatsApp group cowry wise created or perhaps you did.I would love to join.Thanks so much.
Pls I really need hlpe
Wow, this so encouraging, I think I have to stick to it. Thanks
🎉 rooting for you!
Hi Ope, I want to start emergency savings. What percentage of my income do I save . Been battling with this …
There’s a guide that breaks it down for you. Here it is – https://cowrywise.com/blog/emergency-funds-savings-work/
Though there’s no one size fits all, it is advised you save up to six months of living expenses.
This is so that if anything ever happens, you’re covered for at least six months!
Thanks Alot Ope.
No 8 really got me.
This is awesome. . Thank you for this insight. I want to know more about the automatic save and invest. Is it that as I make payment in my cowrywise account , it’s automatically save and automatically invest. Please shed more light
I have never been tutored like this all my years. This is exactly my problem but now cowrywise is my deliverer.
Thank you cowrywise. You are a true financial saviour
Learnt a lot from those, my bad habit is 2:- spending more than I earn.. The article is really nice.. Thank you Ope.
Thank you Ope, this is insightful I’m definitely going to start breaking this bad habits
Thanks for the piece!!!
In the case of a University student who is yet to start earning or probably earn but not so much.
What advice would you give to the person about Cowrywise and bad money habits
I have learnt a lot. Thank you Ope I’ll start saving better and setting more goals
If I thought cowrywise will have a children’s school I could have get admission for them, because it teacher a lot of way out of poverty .I’m very comfortable with cowrywise,God will continue to leaft you up as you’re trying to leaft us up.
Thank you cowrywise 🙏🏽 For clearing bad habits
Thank you 🙏🏽 For clearing bad habits
I learnt a lot from this. Thank you👍
I semt money into my account I have not seen it what’s the problem
Hello Daniel, I’m sorry about that. Please has this been rectified now? If not, please send us an email at email@example.com. Looking forward to help 💙
Nice one ope. Kinda like cowrywise now. Pray it blossoms more. I’m actually a student. 100 level but I have big dreams ahead. No income though but I’m saving from my allowance. Don’t know and still thinking of the possible best income. I don’t wanna go into fraud. But I’ll make it someway. I believe. Thanks for the piece of advise
I’m rooting for you and all your (legal) money moves 🚀💪🏽
10. Impulse Buying : Don’t buy anything you don’t plan for especially all those Pre order shoes , Bags , dresses we buy online, we might think it is ‘awoof’ but something you don’t plan for still doesn’t worth buying at all.let’s make plans and put a stop to impulse purchase.
Thank you Ope for all tips.
Financial intelligence, is the ability to control ones expenses. Do spend your money in asset than lability. For asset, are those things that puts money in our pocket and labilities are those that takes money out of our pocket. Thanks to you all.
All this are great write up thank you Ope!
I uses PiggyVest but I don’t know how to use the investment features of this Cowrywise app.
A guide will be so much appreciated by me🙏
I understand my mistake and I’m very thankful for reminding me!
@ope thank you very much for this piece. Just started using this app but kinda like it.
Just that i don’t know how to use the investment plan
Hmm! What an eye opener. Thanks
How can I get loan to enjoy this business because me I don’t understand I can place orders app
I have just been tutored by you, I hope to be financially wiser henceforth.
Great advice. Thanks for this. People also need to stop spending immediately an dime enters their pocket.
Great advice. Thanks for this. People also need to stop spending immediately an dime enters their pocket.
Wow, thank you for the advice.
Thanks doesn’t seem enough to express how I feel right now. Just know am deeply grateful. God bless you Ope. Am taking baby steps already!
What an eye opener…. More grace Open.
Wow!! I love this write up…I really learnt a lot from it
Thank you Ope for this wonderful reminder. I’m sure to put them into practice ASAP
I’ll recommend the book rich Dad poor dad by Robert kiyosaki. Most of the bad Money habits listed in the article above, was derived from this book. You will find more of bad money mistakes you should avoid in the book written by Robert.
This is just a trick of wooing you to save your money with them. Saving money has never made anyone grow. The risk inherent in Saving is very low, therefore, you earn low return. Saving is not a good investment, channel your money into a productive venture where high returns can be earned.
Ask them for how much interest they will pay on your savings, I can bet it with anyone, it won’t be more than 10% per annum, however, if you are taking loan from, you’ll be deceived with single digit interest rate. E.g 3% flat, which is equivalent to almost 36% per annum. Arithmetically, they will make over 26% on your hard earned money you’re saving with them. My people, please be wise and shine your eyes. These people are just ripping you off. Use your money for productive business venture, you will earn higher returns from it. However, the risk is very high. As I said earlier, high risk begets high returns, while low risk ventures earn low returns.
Thanks for this