When someone cracks a joke about their financial skills, or lack thereof, it often reveals more than they think. A common phrase like “I’m just terrible with money” can actually be a red flag indicating a lack of good financial habits.

We all struggle with budgeting and saving from time to time, but those who consistently joke about it might be missing out on 8 simple habits that could turn their situation around.

So, if you’re one of those people who always seems to be broke, or if you’re just keen on understanding the quirks of human behavior in relation to finance, stick around. We’ll dive into this topic and unravel the mysteries of financial habits that often go unnoticed.

Let’s find out.

1) Ignoring budget plans

Budgeting can be as unpredictable as emotions.

One minute, you feel like you’re on top of your finances, and the next, you’re wondering where all your money went. It’s a rollercoaster ride that can leave you feeling frustrated and helpless.

People who joke about being “terrible with money” often fall into this trap. They might believe that budgeting is too complex or time-consuming, so they avoid it altogether.

But here’s the thing – those who are exceptional at managing their finances understand the value of a well-planned budget. It’s a roadmap that guides their spending and saving habits, ensuring they stay on track with their financial goals.

A budget doesn’t mean you can’t have fun or enjoy life. It simply means being mindful of your spending, understanding your income and expenses, and making informed decisions about your money.

Ignoring a budget plan is much like ignoring an emotion. You might be able to get by for a while, but eventually, it’s going to catch up with you.

2) Not having a savings goal

When it comes to savings, it’s easy to fall into the mindset of “I’ll save whatever’s left at the end of the month”. But let me tell you, from personal experience, that’s a recipe for disaster.

Many years ago, I found myself constantly joking about being “terrible with money”.

I was living paycheck to paycheck, with no savings to speak of. I realized I needed a change when an unexpected car repair threw my finances into chaos. It was a wake-up call that made me reevaluate my approach to saving money.

So, I set a savings goal. Instead of saving what was leftover, I started treating my savings as a fixed expense, something as obligatory as rent or groceries. Each month, a specific portion of my income went straight into my savings account.

And you know what? It worked.

My savings grew steadily and having that financial safety net gave me a sense of security. I no longer felt like I was “terrible with money”. Instead, I felt in control of my finances.

3) Neglecting to track expenses

Imagine you’re on a road trip. You have a destination in mind, but you don’t keep track of the route you’re taking. How likely are you to get lost?

That’s what happens when you don’t track your expenses. You may have a financial goal in mind, but without keeping tabs on where your money is going, you’re likely to veer off course.

In fact, Americans spend an average of $18,000 per year on nonessential items, according to a study. That’s a staggering amount! And it’s not unusual for people to have no clue where much of their money goes.

People who joke about being bad with money often neglect this simple habit. Tracking expenses may seem tedious, but it’s crucial in understanding your financial behavior.

By knowing where your money is going, you can identify spending patterns, detect areas of unnecessary expenditure, and make informed decisions about your finances.

It’s like having a GPS for your financial journey – it keeps you on the right path.

4) Avoiding financial education

You wouldn’t try to assemble a complex piece of furniture without instructions, would you? The same principle applies to managing your finances. Yet, a lot of people who joke about their money problems often avoid learning about personal finance.

Financial literacy isn’t something we’re born with. It’s a learned skill, much like cooking or driving. And yet, it’s often neglected.

Understanding the basics of personal finance – from how credit works to the importance of insurance and retirement planning – is essential for sound money management.

People who excel at managing their finances typically invest time in educating themselves about money matters. They read books, follow reputable financial blogs, attend workshops or use online resources to stay informed.

5) Disregarding an emergency fund

I’ve learned that life has a funny way of throwing curveballs when you least expect them. The car breaks down, the roof starts leaking, or a sudden illness hits. These unexpected expenses can throw your finances into disarray, especially if you’re not prepared.

That’s where an emergency fund comes into play. It’s a financial lifesaver that I can’t stress enough.

People often joke about their lack of money management skills, but what they’re really overlooking is the importance of having a safety net. An emergency fund is not just a nice-to-have, it’s an essential part of a sound financial plan.

When I started building my emergency fund, it wasn’t easy. It meant setting aside money regularly and resisting the temptation to dip into it for non-emergencies.

But over time, I saw its value. It gave me peace of mind knowing I had a buffer against life’s unforeseen expenses.

6) Spending to save

Ever found yourself buying something you didn’t really need just because it was on sale? You’re not alone. Many people fall into the trap of “spending to save”.

The logic seems sound – you’re getting a great deal, so you’re saving money, right? But in reality, you’re still spending. And if it’s not something you would’ve bought at full price or something you don’t really need, then it’s not savings at all.

People who often joke about their financial struggles might be more prone to this habit. The allure of a good deal can be hard to resist, especially if you’re already feeling a bit down about your money management skills.

But those who excel at managing their finances understand that true savings come from not spending at all. They’re discerning about their purchases and mindful of the difference between wants and needs.

Next time you’re tempted by a sale, take a moment to assess. Is it an actual need or just a want masked as a good deal? Your wallet might thank you for the introspection.

7) Overlooking small expenses

It’s easy to remember the big-ticket items when considering our spending habits – the new laptop, the fancy dinner out, the weekend getaway. But what about the daily coffee, the magazine subscriptions, or the random online purchases?

Small expenses often fly under the radar, but over time, they can add up to a significant sum. Those who joke about being “terrible with money” often overlook these seemingly insignificant expenses.

However, individuals who are adept at managing their finances are conscious of their small spending habits. They know that a few dollars here and there can accumulate and impact their savings in the long run.

Being mindful of your small expenses doesn’t mean you have to forgo all your little pleasures. It just means being aware of how they add up and making conscious choices about where your money goes. 

8) Neglecting to set financial goals

Setting financial goals is crucial. Without them, managing money can feel like sailing without a compass – you’re moving, but with no clear direction.

Those who make jokes about their poor money habits often lack clear financial goals. They’re not sure what they’re saving for or how much they need for retirement. This lack of direction can lead to haphazard spending and saving.

However, individuals who are good at managing their finances know the importance of having specific, measurable, achievable, relevant, and time-bound (SMART) financial goals.

Whether it’s saving for a down payment on a house, planning for a comfortable retirement, or building an emergency fund, having clear financial goals can guide your money decisions and help you stay on track.

Don’t let your financial journey be aimless. Set clear and realistic financial goals – it’s the cornerstone of good money management.

Final thoughts on money habits

If you often find yourself joking about being “terrible with money”, it’s not a sign of failure. It’s an opportunity for you to assess your current money habits and make necessary adjustments.

Remember, Benjamin Franklin once said, “Beware of little expenses; a small leak will sink a great ship.” This is just as true for your personal finances as it is for a large vessel.

The path to financial literacy and sound money management starts with recognizing these small leaks — the overlooked habits that can either make or break your financial health.

So, reflect on your financial habits. Acknowledge what you’re doing well and identify what needs to change. You’re not just paving the way to better money management — you’re shaping a better future for yourself.