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Last year after I got serious about wealth building, I became more stable financially. One thing people never tell you when they talk about making money is that you can make all the money in the world, but if you’re bleeding money, you won’t get any wealthier.
Too many people are focused on getting ahead without understanding what’s holding them back. Or what got them in dire financial situations.
So to get in better financial shape, give up your destructive money habits first. That alone will help you to stop your money bucket from leaking. Here are a few of those bad habits that I had to quit.
1. Borrowing money for liabilities
I’m a big believer in the good old platitude, “live below your means.” But if we need to borrow money to buy a car or other consumer goods, what are we doing? We’re living above our means.
I know a guy who leased some kind of mansion in lekki for three years. He told me it cost him about 12million naira a year. That’s 36million naira in three years.
When he told me that a few years ago, he was quite apathetic about it. “I really enjoyed that house, but I can’t help to think that I probably could’ve built my own house with that money.”
Don’t be that guy.
2. Stupid shopping
A lot of people have a consumer mentality. They always need to spend money to have a good time. If you’re getting bored and you think you need to buy something, go on a vacation, eat out, visit a concert, or anything else that requires money, it means you still have a consumer mentality.
It’s nothing to be ashamed about. Most of us grow up with this mentality. I’m no different. Almost everyone in my immediate family is a consumer.
And look, sometimes I still feel the pull to buy myself out of discomfort. I just want to browse the web and feel like spending money. That’s mindless shopping. And if you keep spending your money on things or experiences that you assume will make you happy, it will only empty your bank account. To be in good financial shape, we need to give up our consumer mentality. Instead of relying on consumerism for our happiness, we need to rely on inner joy and practice more mindfulness.
3. Having one income stream
People who have one income stream usually live with a perpetually fearful state of mind and terrible money habits. They realize that their income is vulnerable. If they rely on only one website like YouTube or Medium for 90% to 100% of their income, they do anything to defend their income source.
It’s the same for people who have a job without much prospects. They’re afraid to lose their job, so they say yes to everything and let people walk over them at work. That’s how many people become bitter over time. But you don’t have to do that. By investing in yourself and spending less time on entertainment and consumerism, you can build a more stable career.
You can build a side business, invest your money in real estate or dividend stocks, or work in a field with a lot of job prospects. When you have options, you feel more at ease.
Having multiple income streams is the most important money habit because it’s a different perspective. Most of us grow up with the mindset of a consumer and worker. You get a job, put your head down, do what they say from 9 – 5, and then you get paid so you can live in the evenings and weekends. That doesn’t sound like a good deal to me. If we control our money, we take control over the practical aspect of our lives. Sure, it’s not the answer to everything, but it sure will give you more freedom. The price is that you need to give up certain money habits, but is that really so bad?
4. Spending time to save pennies
I used to spend hours online searching for deals on clothes or shoes. I even bought running shoes that were on sale instead of the ones that were actually good for my feet. Those shoes ended up injuring me.
But then, I read that Naval Ravikant doesn’t even bother returning items that are worth less than he values his time.
Naval believes everyone needs to put a dollar value on their time, and use that to make decisions.