Background
Some people look at wealthy individuals and assume their success is tied only to luck, inheritance, or connections. But the truth is, more often than not, financial success (or failure) is a product of habits. Just as good habits lead to growth, bad habits can quietly drain your resources and keep you stuck in the cycle of “always broke.”
The good news? These habits are not permanent. They can be identified, challenged, and replaced with better ones. If you’ve ever found yourself asking, “Why am I always broke, despite working hard?” this post is for you.
Here are five money habits that keep people broke, plus how you can replace them with smart financial choices that lead to stability and growth.
1. Spending More Than You Earn
This is the fastest way to stay broke. Many people live above their means — buying things to impress others, living on credit, or spending emotionally without thinking about tomorrow.
When your expenses are higher than your income, you’re digging a financial hole that only gets deeper with time. It’s not just about big purchases; even small, frequent spending on “wants” adds up.
How to fix it:
- Track your spending for a month and identify leaks.
- Create a budget and stick to it.
- Learn contentment — just because you can buy something doesn’t mean you should.
- Aim to live below your means, not at the edge of them.
Wealthy people don’t necessarily earn more; they manage better.
2. Lack of Financial Education
Many people never take the time to learn how money works. They avoid reading about finance, ignore investment opportunities, and depend only on salary. This ignorance is costly because money rewards those who understand it.
Think about it: we spend years in school learning subjects we rarely use in daily life, but many leave school without knowing how to budget, save, or invest.
How to fix it:
- Read personal finance books (e.g., Rich Dad Poor Dad by Robert Kiyosaki).
- Follow finance podcasts and blogs.
- Take free online courses on money management and investing.
- Surround yourself with financially wise people and learn from them.
Financial literacy isn’t optional — it’s the foundation of financial freedom.
3. Not Saving or Investing Early
“I’ll save when I earn more.” This is a dangerous mindset. Waiting until you “have enough” to save means you’ll never start. Many broke people delay saving until it’s too late, missing out on the power of compound growth.
Even a small amount — ₦500 a week or $5 a day — consistently saved and invested can grow significantly over time.
How to fix it:
- Start small and increase gradually.
- Automate savings: treat it like a bill you must pay.
- Learn about safe investments like mutual funds, index funds, or treasury bills.
- Understand compound interest — the earlier you start, the more your money works for you.
Think of saving as paying your future self first.
4. Depending on Only One Income Stream
Relying only on your salary or one hustle is risky. Jobs can be lost, industries can collapse, and one income may never be enough to build wealth. This habit of “putting all your eggs in one basket” is one reason many remain broke.
Successful people diversify their income. They don’t depend only on active work; they create passive streams.
How to fix it:
- Explore side hustles that match your skills.
- Use technology — freelance online, sell digital products, or start a blog/YouTube channel.
- Invest in assets that pay you back: real estate, stocks, or small businesses.
- Develop multiple skills so you can adapt to changing times.
Money multiplies when it comes from multiple streams.
5. Wrong Mindset About Money
One of the biggest reasons people stay broke is their mindset. If you believe money is only for paying bills, you’ll never think about how to grow it. Some even see money as “evil” or feel guilty for wanting more.
The truth? Money is a tool. It’s neither good nor bad — it depends on how you use it. People with the wrong mindset about money often avoid learning, investing, or taking calculated risks, keeping them stuck in survival mode.
How to fix it:
- Shift your thinking: see money as a tool to create freedom, opportunities, and impact.
- Set financial goals — know what you want money to help you achieve.
- Take calculated risks — don’t fear investment, fear standing still.
- Practice gratitude and generosity — money grows in the hands of those who use it well.
When your mindset shifts, your habits will follow, and so will your financial results.
Final Thoughts
Staying broke isn’t about fate or luck; it’s about habits. Spending more than you earn, avoiding financial education, not saving or investing early, depending on one income, and having a wrong mindset about money are traps you can escape.
Remember: you don’t need to change everything overnight. Start with one small shift — create a budget, read one finance book, save ₦500 this week, or explore one new income stream. Over time, these small, consistent changes will transform your financial life.
Money will either work for you or against you. The choice is in your habits.