Wondering why you seem to remain poor as your income increases? Truth is, it is not only about how much money you make but about how well you are able to manage your money. Many people are still not reaching their financial goals even though the amount of money entering their pockets seems to increase. Why is this? What are the bad habits that keep you poor?
You spend more as your income increases
Are you the type to upgrade your Iphone as soon as your pay check increases? If you are guilty of this, it might be the reason you still do not feel like you are on your way to financial independence even though your income increases. If you continuously raise your expenditure along with any increase in your income (or even without it), it would be hard to have any real savings.
You do not think about the future
Not thinking about the future is a mistake many of us make. We live day by day without thinking about a saving plan for the tougher days. It is never too early to save a portion of your income, no matter how low or high your income is. Saving will provide a plan B for unexpected life events (which are inevitable) and avoid you spending all of your money at once.
You do not keep a record of your money
keeping a journal for all your income and expenses will help you have a much better idea for controlling your finances. Keeping a record will allow you to take a step back and identify the things you spend too much money on. It will also help you identify ways to save up more. For instance, by keeping records, you might realize that you spend way too much money on gas. This might lead you to invest in a bike that will help you save up a lot of money while staying in shape.
You ignore the elephant in the room
Debts do not just disappear because you are very good at ignoring them. First of all, make paying your debt a top-of-the-list item on your agenda. Work out a plan for this and stick to it, no matter what. No matter how much your income increases, you will end up spending all of your money on interests if you do not take care of your debts.
You do not budget
It is important to know your daily needs and budget for them. Failing to budget is setting up yourself for failure. Budgeting has a huge impact on how you manage your money. Make sure you do not always cover your basic needs but also leave space for leisure and things that make you happy. Being too strict on your budget will increase your chances of slip ups. Give yourself the luxury to enjoy things in moderation.