5 Money Habits Keeping You Poor: How to Break Them and Achieve your Goals

“The habits you form will either make you or break you.” – Warren Buffett

Financial wellness is key to a fulfilling life and career, especially for high-achieving professionals like women optometrists. Yet, even with a solid income, certain financial habits can keep you from building wealth. Let’s explore five money habits keeping you financially strained and share practical tips to replace them with healthy habits that build wealth and security.

1. Living Beyond Your Means

It’s easy to feel tempted by the lifestyle that a high-income can afford, from a beautiful home to designer clothing. However, when your spending outpaces your earnings, you’ll quickly find yourself struggling to save, give, invest, and build wealth. Many people think that a raise or higher income will solve their financial issues, but more income often leads to more spending if lifestyle habits don’t change.

Real-Life Example:

Dr. Emma, a successful optometrist, found herself buried in debt despite a six-figure income. By tracking her spending, she realized that her monthly shopping sprees, luxury gym membership, and high dining-out expenses were draining her savings. By setting a monthly budget and finding joy in experiences rather than things, she reduced her expenses by 30% and started saving and investing consistently.

Break the Habit:

• Track your spending to know exactly where your money goes. You can use resources such as Empower or an Excel Spreadsheet.
• Create a budget and stick to it.
• Focus on living below your means and remember: the best wealth-building strategy is to save and invest, not just spend.

2. Failing to Plan for Financial Goals

One common habit that holds many professionals back is a lack of goal-setting. Without clear financial goals, it’s easy to fall into a routine of spending what’s left over rather than investing for the future. Setting specific goals gives your money a purpose and allows you to build a realistic roadmap to financial independence.

“A goal without a plan is just a wish.” – Antoine de Saint-Exupéry

Practical Tips:

• Set short-term and long-term goals like paying off debt, saving for a house, or retiring early.
• Break down large goals into achievable monthly targets to maintain momentum.
• Use budgeting apps like Mint, You Need A Budget (YNAB), or Quicken to track your progress and keep you on course.

3. Relying Heavily on Credit Cards and other Debts

While credit cards offer convenience and sometimes rewards, they can quickly lead to financial strain if you rely on them for everyday purchases or luxury spending. High-interest rates can lead to debt spirals, turning a temporary convenience into a long-term burden.

Story:

Dr. Sarah initially used her credit cards for points and rewards but soon found herself with $15,000 in debt from unchecked spending. The high-interest rates made it hard to pay down her balance, and she realized she was losing hundreds monthly to interest. She decided to pay down her balance aggressively and switched to a cash-only system for daily expenses.

Break the Habit:

• Use credit cards strategically and avoid using them for purchases you can’t afford to pay off by the end of the month.
• Set limits on your spending or move to a debit system to avoid accumulating interest.
• Aim to pay off high-interest debt first and avoid adding to it unless absolutely necessary.

4. Not Investing Early or Consistently

Many people avoid investing due to fear, lack of knowledge, or the misconception that they need a lot of money to start. However, time is one of the most powerful tools in building wealth. Failing to invest early limits the growth potential of your money.

“The best time to plant a tree was 20 years ago. The second-best time is now.” – Chinese Proverb

Real-Life Example:

Dr. Maria, an optometrist in her 30s, started investing a portion of her income early in her career. By consistently contributing to her retirement and taxable investment accounts, she grew her wealth significantly by the time she hit her 40s, allowing her to consider early retirement.

Tips to Start Investing:

• Start with retirement accounts like a 401(k) or Roth IRA.
• Consider investing in low-cost index funds for diversified growth.
• Speak to a financial advisor to explore investment options that align with your risk tolerance.

5. Ignoring Financial Education

One of the biggest reasons professionals struggle financially is lack of financial literacy. Many people feel overwhelmed by the world of finance and choose to ignore it altogether. However, understanding basics like compound interest, investment strategies, and budgeting principles can have a massive impact on financial well-being.

Video Resource:

Watch this video on financial literacy to gain a foundational understanding of essential finance principles.

Build Financial Literacy:

• Set aside time each month to learn about finance, whether by reading books, taking online courses, or watching educational videos.
• Read personal finance books like “Rich Dad Poor Dad” by Robert Kiyosaki or “The Intelligent Investor” by Benjamin Graham.
• Join communities, like the Optometry Divas, that focus on financial empowerment and provide valuable resources for continued learning.

Building Wealth, One Habit at a Time

Breaking free from these habits is essential to achieving financial independence. By tracking expenses, planning for goals, avoiding debt traps, investing early, and expanding financial literacy, you set yourself on a path toward financial security.

“We are what we repeatedly do. Excellence, then, is not an act but a habit.” – Aristotle

Taking control of your finances doesn’t happen overnight. It’s a process. With a winning Mindset (patience and education), winning Strategies, and a winning Team, you can break free from limited money habits, and achieve financial freedom, one step at a time. Remember: small, consistent changes today lead to long-term success tomorrow.

Call to Action

Ready to take control of your financial future? Start by joining the Optometry Divas community, where we support each other’s journeys in building wealth, financial freedom, and a fulfilling career. Our resources, mentorship, and empowerment can help guide you through every step toward financial success.

Disclaimer:

This blog is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor to build a personalized financial plan that aligns with your specific goals and needs. Top Image by Alexander Grey from Pixabay, used under the Pixabay Content License.