5 Surprising Things That Could Leave You Poor

US NEWS AND WORLD REPORT

 

 

 

Good money management is all about creating a budget and sticking to it, right? Well, you might be surprised to see what else is involved.

By Maryalene LaPonsie | Contributor Aug. 12, 2016, at 12:19 p.m.

If you want to live the good life, financially-speaking, you might expect to need a job that pays well and a plan for how to responsibly spend the money you earn. However, there could be more to it than that.

Your health habits, friends and even how many times you check your credit score could all have an impact on your financial security. Here’s a closer look at five things that have a surprising effect on your money situation.

Smoking and your other bad habits. When you think about it, it’s not too surprising that spending money on a habit means less cash is available to save or invest. In case there was any doubt, Jay Zagorsky, an economist at The Ohio State University, published research in 2004 that demonstrates heavy smokers have a net worth that is $8,300 less than non-smokers. The net worth for light smokers was $2,000 less than non-smokers. On average, smokers had a 4 percent decrease in wealth for each year they lit up, a number that is roughly the same as what an average smoker might spend on his or her habit each year.

[See: 10 Painless Ways to Save More for Retirement.]

“The study was done a few years ago, so the numbers are different now,” Zagorsky says. He also stresses that the study doesn’t prove smoking causes less wealth, but it does suggest a link. When asked if the research could apply to tobacco-less products, Zagorsky says, “My guess is e-cigarettes are the same.” While there isn’t research on every bad habit, it might be safe to assume other behaviors, such as $5-a-day latte habit, could have a similar effect. “Adding an extra habit just reduces your wealth,” Zagorsky says.

ADVERTISING

inRead invented by Teads

The company you keep. Thomas Corley, author of “Rich Habits – The Daily Success Habits of Wealthy Individuals,” says people can end up in “poverty by association.” In other words, if they spend their time with friends and colleagues who have poor money habits, they may pick those up for themselves. “I actually believe bad habits are a function of your environment – the household you grew up in and the neighborhood you live in,” Corley says. If your friends spend each weekend dining at expensive restaurants or shopping at the mall, chances are you will, too, a practice that could quickly deplete your bank account.

Fortunately, the effect of friends can work the opposite way as well. Frugal friends can help you keep spending in check or offer accountability for a common goal such as getting out of debt. “Surround yourself with people who have the habits you want to adopt,” Corley says.

[Read: 5 Ways to Break Your Bad Money Habits.]

How you were raised. While people can control their friends, they have less control over their family, who can also have a significant impact on a person’s ability to build wealth. “I’m 100 percent convinced habits are a function of early upbringing,” Corley says. Children raised in households where parents gambled excessively, maxed out credit cards or took out payday loans may grow up to do the same.

That can be discouraging for people raised in these households to hear, but Corley believes they aren’t necessarily destined to repeat the financial sins of their parents. “Just because I’m born into certain circumstances doesn’t mean I’m stuck in them for the rest of my life,” he says. Having awareness of those bad habits and making a conscious commitment to avoid them is key.

Checking your credit score regularly. Obsessing over your credit score could actually help you increase the number. “Consumers who are more aware of their credit score are more motivated to improve it,” says Laks Vasudevan, vice president of products and innovation for Discover.

The credit card company recently surveyed 2,000 adults and found 76 percent of those who checked their credit scores at least seven times a year said their number had greatly or slightly improved in the previous year. “We believe knowledge is power,” Vasudevan says, adding that Discover has recently begun providing free credit scores on its website to all consumers regardless of whether they are cardholders.

Buying what you want, when you want. Spontaneous spending comes with a couple of pitfalls, according to Corley. “A lot of people have a poor habit of buying things they don’t need,” he says. Not only that, but they may not put a lot of thought into the price either.

“The poor don’t track their spending,” Corley says. “They have absolutely no idea if they are paying too much for something.” This type of on-the-fly buying has the potential to financially wreck people if they have limited funds and then spend what little they do have on unnecessary or overly expensive purchases.

[See: 10 Costs You Can Eliminate in Retirement.]

Being a more thoughtful consumer won’t instantly transform a person’s bank account, but it will create momentum toward a more financially stable future. Checking your credit score and quitting your expensive habits won’t hurt either.

 

Thomas C. Corley About Thomas C. Corley

Tom Corley understands the difference between being rich and poor: at age nine, his family went from being multi-millionaires to broke in just one night, due to a catastrophic fire that destroyed his Dad's thriving business. For fourteen years they struggled with poverty. There were eleven in Tom's family, and they lived in constant fear of losing their home.

Driven by the desire to unlock the secrets to success and failure, Tom spent five years studying the daily activities of 233 rich people and 128 poor people. He discovered there was an immense difference between the habits of the rich and the poor. During his research he identified over 300 daily activities that separated the “haves” from the “have nots.” Tom decided to write a book to share what he learned. That book, Rich Habits: The Daily Success Habits of Wealthy Individuals (1st Edition), went on to become an Amazon Bestseller in the United States forty times over a three year period. To give you some perspective, in order to be a true Amazon Bestseller in the United States, where you actually receive a specific Bestseller designation from Amazon, you need to be in the top 100 of all books sold by Amazon in the United States in a given day. Rich Habits did that for nearly thirty straight days, rising as high as #7, eclipsing such Bestselling authors such as Stephen Covey, Robert Kiyosaki and J.K. Rowlings. Imagine that - an unknown, first-time, self-published author selling more books than J.K. Rowlings!

Tom now travels the world, sharing his Rich Habits and motivating audiences at industry conferences, corporate events, universities, multi-level marketing group events, and global sales organizations’ presentations and finance conferences. He has even spoken on the same stage with famous entrepreneurs and personal development experts, such as Sir Richard Branson, Robin Sharma, Dr. Daniel Amen, and many others.

Tom has shared his insights on various national and international network, cable, and Internet television programs such as CBS Evening News, NBC News, Yahoo Financially Fit, Money.com, India TV, News.com Australia, and a host of others. He has been interviewed on many prestigious nationally syndicated radio shows, including the Dave Ramsey Show, Marketplace Money, and WABC.

Tom has been featured in numerous print magazines—such as Money magazine, Inc. Magazine, SUCCESS Magazine, Entrepreneur magazine, Fast Company magazine, More magazine, Epoca Magazine (Brazil’s largest weekly) and Kiplinger’s Personal Finance magazine—and various online publications, including USA Today, CNN, MSN Money, SUCCESS.com, Inc.com, and the Huffington Post. Tom is a frequent contributor to Business Insider, Credit.com, Bankrate.com and a few other media outlets.

National publicity has garnered international media attention for Tom and his Rich Habits research spanning 23 countries. Broadcast media, online publications, and television throughout Asia, the South Pacific, Europe, the United Kingdom, and Central and South America have shared his powerful message.

In an effort to help parents, grandparents, teachers and adults become success mentors to the younger generation, Tom released his second book, Rich Kids: How to Raise Our Children to be Happy and Successful in Life in 2014. This book was the self-help category winner of the 2015 New York Book Festival and Runner-up in the prestigious 2015 Writer’s Digest Self-Published Book Awards Contest. In 2016 Tom released his third book, Change Your Habits, Change Your Life. This book provides the latest science on habit change as well as more of Tom's unique research on the specific habits that helped transform 177 ordinary individuals into self-made millionaires.

Besides being an author, Tom is also a CPA, CFP, and hold a master’s degree in taxation. As president of Cerefice and Company, CPAs, Tom heads one of the premier financial firms in New Jersey.
 
Phone Number: 732-382-3800 Ext. 103.
Email Tom
| Download Media Kit

Speak Your Mind

*

CommentLuv badge