5 Money Habits of the Poor Mindset

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You’ve likely heard of abundance mentality and the law of attraction. Habits of the poor mindset are things people do to stay broke.

Many people think the abundance mindset is just a bunch of hogwash. They think there’s no way you can attract positive things, more money, good vibes, etc into your life.

Oftentimes these people who have such a negative outlook are living paycheck to paycheck or struggling financially.

I used to be a skeptic, but I’ll tell you that whole saying “Your vibe attracts your tribe” is true. If you put out positive vibes, you’ll attract like-minded go-getters.

And true winners encourage others to win along with them!

Habits of the Poor Mindset

1. They Don’t Make Savings a Priority

I used to listen to a very prominent radio show host that suggests you should stop all retirement contributions while trying to pay off debt.

This is the worst thing you can do (especially if your employer offers a company match on 401k contributions)!

You have to pay yourself first, and then take care of all other responsibilities. I recommend the following:

1. Take advantage of the employer match. If your company matches 100% of your contributions up to 5%, contribute 5%. The money is saved pre-tax, so you’ll save money and it won’t affect your paycheck quite as much.
2. Save an additional amount up to a total of 10% (if in debt). So if you’re contributing 5% to retirement, save another 5% in an emergency fund. If you’re debt-free, save as much as you possibly can. You can radically grow your nest egg and retirement accounts once your debt is paid off! The power of compound interest is a wonderful thing!

If you need a great place to start an emergency fund, I recommend the money market account with CIT Bank.

You can open an account with just $100 deposit and it earns much higher interest than traditional local banks.

2. They Live Broke

Your language tells a story. If you’re negative and constantly talk about how broke you are, you will continue to struggle.

Poor people stay poor. People with an abundance mentality speak life into their goals, literally breathing them into existence.

Stop saying you’re broke. Quit saying you can’t afford it. Instead talk about how you’re going to increase your income and pay off your debt.

This list offers 81 side hustle ideas you’ve probably never considered. Check it out and find something that speaks to YOU!

3. They Stay in Debt

Now, I’m not just referring to auto loans, although there is something to be said about having zero car payments.

Credit card debt can be crippling. And student loan debt can seem like it will never go away. Many college students racked up student loans to pay for school, and they ended up going into the public sector (earning less than expected).

Even worse, many didn’t even graduate from university.

Yikes!

4. They Fail to Budget

So how do you pay off your debt when you feel like you’re drowning? The first step is to look at your entire financial picture.

Do you have any cash in the bank that could be used to pay off debt?

Do you have a large amount of equity in your home?

Once you’ve determined how much (or little) you have to put towards debt, it’s time to put a plan in place to pay it off fast.

You need a budget for every single time you get paid. If you’re married, this includes every single paycheck your spouse receives.

This can be tricky, but it helps to put it on paper and track your spending. You’ll also want to determine your cash envelope wallet categories and keep some cash on hand for things like groceries, gasoline, and fun money.

5. They See Cars as a Status Symbol

Poor people might be disguised as fancy businessmen and women who seem to have it all together.

I have absolutely no problem driving a 10-year-old vehicle, but some of my colleagues wouldn’t be caught dead in a car without a heated steering wheel and Apple Car Play.

A good rule of thumb I picked up from my friend and fellow YouTuber Marko at WhiteBoard Finance is to determine car affordability based on the following calculations:

1. Can you afford to put 20% down in cash?
2. Max Loan Term = 48 months (4 Years)
3. Car Payment <= 10% Total Monthly Income

Here’s the video explaining how to determine if you can afford a car.

If you can honestly say that you follow one or more of these poor money habits, it’s time to change your money mentality and behaviors.

Start by establishing a good budget, tracking spending, and paying off your debt along with saving money for emergencies and retirement, and you’ll be on the road to having more money in no time!