Have you ever checked your bank balance and wondered where all your money went? If this sounds like you then more likely than not you are practicing money habits that will keep you poor forever therefore, in this article, I will share with you 7 expensive habits that will keep you poor forever!
Habit #1: Spending more as you make more
Let’s face it, spending money is fun. In fact, there is scientific evidence to support this phenomenon. When you’re considering buying something, your brain releases dopamine. Dopamine is a chemical produced by our brains that plays a starring role in motivating behavior. It gets released when we take a bite of delicious food, when we have sex, after we exercise, and when we spend money. In an evolutionary context, it rewards us for beneficial behaviors and motivates us to repeat them. This is why humans have such a hard time resisting spending and often this spending is only curbed when all funds have been depleted and credit cards have been maxed out.
However, when people come into money, this problem perpetuates. Maybe you got a bonus at work or a promotion. These increases in income trigger our inclination to spend as we continue to chase that dopamine high. But it’s not just the dopamine high that makes us open our wallets and spend. We also feel an intense need to fit in with our peers and one way that we can maintain our social status in society is by having the nicest clothes or the newest car. Unfortunately, this incessant spending is keeping us broke. You see, if you spend every single dollar you make, you will never be able to save money, invest or retire. What separates the rich from the poor is the management of their money. Whereas the majority of people spend every new dollar they earn, the rich maintain their modest lifestyles as their incomes rise. This allows them to begin saving more and more money as their cash inflow increases. But the rich don’t just hoard this money. They then deploy this money into investments like ROTH IRAs, mutual funds, investment properties or their own business to allow this cash to grow further. Therefore, if you want to become wealthy then you must avoid spending more as your income rises.