I used to be the person who was always broke, no matter how hard I worked or how much I earned.

It felt like money would disappear before I had a chance to enjoy it, and I couldn’t understand why others seemed to have it all together.

Eventually, I realized that my financial struggles weren’t just about how much I made—it was the subtle habits I had that were quietly draining my finances.

Once I recognized these patterns and made some changes, my situation started to improve.

My finances shifted from constantly scraping by to actually saving and investing.

In this article, I’ll share the 7 subtle habits I discovered that can keep people stuck in a cycle of financial stress—and how I turned things around.

1) Living for the moment

We’ve all heard the saying, “Live in the moment.”

It’s great advice when it comes to mindfulness and enjoying life’s experiences.

But when it comes to managing your finances, this mindset can lead to trouble.

Why?

Because living for the moment often translates into:

• Impulse buying
• Overspending
• Neglecting to plan for the future

It’s a habit that tends to prioritize immediate gratification over long-term financial stability.

We don’t always recognize we’re doing it, because it feels good in the moment.

But those little splurges add up and can leave you scratching your head at the end of the month, wondering where all your money went.

Breaking this habit requires a shift in mindset – understanding that financial stability and planning for the future can offer its own form of gratification.

2) Ignoring the budget

Here’s a confession: I used to be terrible with budgets.

I’d create one, sure. But sticking to it?

That was another story.

I’d convince myself that a small deviation here and there wouldn’t hurt.

A fancy dinner out. A new gadget I didn’t really need.

And before I knew it, my budget was blown to bits and I was wondering why I was always short on cash at the end of the month.

Sound familiar?

It’s easy to see a budget as a restriction, something that limits your freedom. But in reality, it’s quite the opposite.

A budget is a financial roadmap.

It guides your spending decisions and helps you allocate your resources wisely, preventing you from falling into debt or running out of money before your next paycheck.

It’s about taking control and being proactive about your finances, rather than reactive.

It requires discipline and consistency, but the peace of mind it brings is well worth the effort.

Trust me on this one – since I started taking my budget seriously, my financial situation has improved dramatically. And yours can too.

3) Falling prey to lifestyle inflation

Let’s talk about that sweet, sweet raise you just got.

You’re probably thinking about all the things you can now afford, right?

The upgraded car, the designer clothes, the fancy dinners out. Heck, why not? You’ve earned it!

But here’s the truth.

As our income increases, so too does our spending – a phenomenon known as lifestyle inflation.

We start living a little (or a lot) more luxuriously, and before we know it, we’re back to living paycheck to paycheck, despite earning more than we ever did before.

I get it. It’s easy to feel entitled to indulge and treat ourselves when we start earning more.

But this can quickly spiral out of control and leave you in a worse financial spot than you were in before your raise.

Psychology tells us that we’re wired to seek immediate gratification and reward – it’s part of our survival instincts.

But when it comes to money management, this instinct can be our worst enemy.

The trick is to strike a balance between enjoying your hard-earned money now and setting some aside for your future self.

After all, what’s the point of earning more if you’re just going to end up broke all over again?

4) Neglecting to save for emergencies

Here’s a harsh truth: life is unpredictable.

Cars break down. Medical emergencies happen. Jobs can be lost.

And these unexpected events often come with hefty price tags.

If you’re not setting aside some money for these unforeseen expenses, you’re setting yourself up for financial stress and possibly debt.

You might think, “Oh, I’ll start saving when I earn more,” or “I’ll just deal with it when it happens.”

But trust me, when crisis hits, the last thing you want to be worried about is where the money’s going to come from.

Psychology suggests that we tend to underestimate the likelihood of bad things happening – a cognitive bias known as optimism bias.

It’s why we often neglect to prepare for emergencies.

But having an emergency fund provides a safety net and can mean the difference between a minor hiccup and a major financial setback.

So, start building that emergency fund.

Even small contributions can add up over time and provide peace of mind that you’re prepared for whatever life throws your way.

5) Being unaware of where the money goes

I’ll admit, I’ve been guilty of this one more times than I’d like to admit.

For a long time, I didn’t track where my money was going.

I’d get paid, spend here and there, and before I knew it, the month was over and I was scrambling for cash.

I had no real idea where it all went.

This is a common habit among people who always seem to be broke.

You might be shocked to discover how much you’re spending on non-essential items like takeout coffee, online subscriptions, or late-night online shopping sprees.

It’s like a financial blind spot.

You don’t see it, so you don’t think it’s a problem.

But those small, regular expenses can quickly add up and eat into your available funds.

The remedy?

Start tracking your spending.

There are plenty of budgeting apps out there that can help you see exactly where your money is going each month.

Knowledge is power, especially when it comes to managing your finances.

By understanding your spending habits, you can make informed decisions and take control of your financial future.

6) Letting guilt or shame dictate spending

We’ve all been there.

You’re out with friends and everyone else is ordering pricey cocktails and gourmet meals.

You know you should stick to your budget, but you don’t want to seem cheap, so you go along with it.

Or maybe it’s your child’s birthday and even though money is tight, you feel guilty about not throwing the biggest and best party, so you spend more than you can afford.

Let’s be clear: it’s perfectly natural to want to fit in or make our loved ones happy.

But when guilt or social pressure starts to dictate our spending, it can lead to financial trouble.

Remember, everyone’s financial situation is different.

What others choose to spend their money on doesn’t have to dictate your spending choices.

Self-compassion can play a crucial role in breaking this habit. It’s okay to say no or choose less expensive options.

It doesn’t make you a bad friend or parent.

It’s not about being stingy – it’s about making smart financial decisions that align with your personal circumstances and long-term goals.

And there’s absolutely nothing to feel guilty or ashamed about in doing that.

7) Ignoring financial education

Here’s the thing: we’re not born knowing how to manage money.

It’s a skill, and like any skill, it takes time and effort to learn and master.

If you’re constantly finding yourself short on cash, it might be because you’re missing some key pieces of financial knowledge.

Perhaps you don’t have a good understanding of how credit works, or you’re not sure how to invest your money effectively.

This isn’t something to be embarrassed about – many people are in the same boat. But it’s definitely something you can change.

 The more you understand about finances, the better equipped you’ll be to make sound financial decisions and avoid money pitfalls.

So, take some time to educate yourself. Read books, take a course, follow financial blogs or podcasts.

You don’t have to become a finance guru overnight, but every bit of knowledge you gain is a step towards better financial health.

The final note

If you’re nodding along to these points, don’t worry. Many of us have been there.

But here’s the silver lining – recognizing these habits is the first step towards changing them.

With self-awareness and deliberate action, these tendencies don’t have to be your financial downfall.

Start by looking at your own behaviors.

Notice when you’re living for the moment, ignoring your budget, or letting guilt sway your spending.

Detect when you’re oblivious to where your money goes or neglecting to save for emergencies.

Then ask yourself – does this align with my financial goals?

Am I making choices that support my future self? Is there a better way I could be handling this situation?

With each conscious decision to save rather than spend or to stick to your budget rather than ignore it, you’re building a stronger financial future.