Prime Example of Poor Money Habbits

by Bill on November 23, 2011

Do you run out of money before the end of the month? And is it because of a low income or poor money habits?

I know of a couple, with a four year old child. Their income is in the poverty level – around $1300 per month. They get food stamps, Medicaid and heating assistance. They don’t own a car. The rent is only $300 per month. Yes, by the looks of it they should be able to float by. But they can’t. Often they are behind on electric and sometimes heat. They are borrowing money to get by from family around the middle of the month each month.

Here’s the reason – poor money habits. No not that they don’t try to budget their income. And they do pay back the borrowed money each month. No, their problem comes from their hierarchy of payment and their understanding of wants versus needs.

Here are some examples:
? They pay borrowed money before the utilities. Now while I will say that paying back money is the correct thing to do, paying the utilities should be right up there with paying rent. Oh, did I mention these guys are behind in rent.

? They head for Walmart or Kmart the day their money comes in. Again, I agree that getting everything you need in one shot is a good idea; but there is also overkill. They come home with new DVDs each month. They buy pizza and McDonald’s that day too. The four-year old child doesn’t get just one toy, he gets a few toys; and at least one is usually between $20 and $40.

? While the bills get paid by the 3rd, they usually send what they can – but never the full amount owed.

? They continuously ignored certain bills such as the cable bill (which was turned off after five months of non-payment). Then they wondered why the bill was near $600 and commented that the company wouldn’t be able to collect it anyhow since they have no money.

? There is no savings plan. There is no effort to save up for any future needs, wants or emergencies. The excuse is there is no money; when in reality poor money habits eat up money that could be used for savings given good management and budgeting.



While not everyone has the same income or the same excessive spending habits, you should be aware if any of these poor money habits are ones you may have. Here are a few warning signs you may have poor money habits.

? You must borrow money each month to get to the next month. To eliminate this problem either curtail your spending or find more income. Make arrangements to pay back part or even half of the borrowed amounts each month and then stop borrowing money until everything is paid back.

? You can’t pay the bills off each month or pay them when you have time Pay the bills the same day you pay the rent or mortgage. If you write checks, write the utilities first before the rent. Pay the credit card bills at this time as well. Get everything in the mail that day; the Postal Service still picks up mail at the house so you can simply put the mail at your mailbox. This eliminates the excuse of not wanting to go to the Post Office or a mailbox. If you can, pay everything online to avoid the excuse you don’t have stamps.

? You run out of things you need to live by the middle of the month repeatedly. Do not buy a single item until all bills, rent and food are paid for – for the entire month. Yes, I am saying to buy all the food at once if needed; this eliminates having to worry about not having later. Once the needs are taken care of, you can budget the leftover funds.

? You have no savings whatsoever. Make a habit of writing yourself a check to deposit into your savings account. And yes, if you don’t have a savings account, you need to get one. Even if you are down to your last five bucks, put it into the bank.

? You splurge before paying bills. Buy one toy or pleasure each month – one. This way you are not depriving yourself but you still aren’t breaking yourself either. I’m going to extend this to say go ahead and buy pizza once a month, or Chinese or whatever – but make it a monthly thing not weekly.

Making habits is easy. That’s why bad habits are as easy to acquire as good habits. The trick is to replace each bad habit with a good habit.

So what poor money habits can you eliminate this month?

Be Sociable, Share!

{ 3 comments }

Afifa November 25, 2011 at 11:03 am

The money is there, but unfortunately, the poor will not see that money because the government can always find something else to spend it on. Part of the problem is that the poor are often the part of the population that doesn’t vote, so the politicians are more interested in helping the people who do the voting and have the influence and money. Those are the people who put them into office, so they are going to cater to those people.
Afifa recently posted..100 day marathon planMy Profile

Elijah December 2, 2011 at 1:42 pm

Make a habit of writing yourself a check to deposit into your savings account. This way you are not depriving yourself but you still aren’t breaking yourself either. I’m going to extend this to say go ahead and buy pizza once a month, or Chinese or whatever – but make it a monthly thing not weekly.
Elijah recently posted..penny stock tradingMy Profile

Bill December 13, 2011 at 2:24 pm

I should probably do a post on this point. Thanks Elijah!

Comments on this entry are closed.