Some Common Bad Money Habits

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Thanks to my Rich Habits Poor Habits research, I have accumulated a lot of data on bad money habits. Below is a list of some of the most egregious Poor Money Habits:

  • Charging ordinary living expenses on a credit card. If you are unable to afford meeting your ordinary living expenses and must resort to the use of a credit card to meet your monthly living expenses, you are by definition, living above your means. Accumulating credit card debt is the third leading cause of bankruptcy, behind a job loss (#2) and medical costs (#1).
  • Spending more than 25% of your net income on housing costs. Housing costs include rent, mortgage, real estate taxes, utilities, insurance, repairs and maintenance.
  • Spending more than 15% of your net income on food. This includes groceries and does not include prepared food. Prepared food is part of your entertainment budget.
  • Spending more than 10% of your net income on entertainment/gifts. This category includes bars, restaurants, movies, music, books, gifts etc. Eating out and any prepared food you purchase is part of your entertainment budget.
  • Spending more than 5% of your net income on car expenses. Car expenses include a lease, loan, insurance, gas, tolls, registration fees, repairs and maintenance.
  • Spending more than 5% of your net pay on vacations.
  • Spending any money on gambling. If you’re going to gamble it should come out of your entertainment budget.
  • Going over the top on gift giving. Gifts are part of your entertainment/gift budget. Sticking to your 10% budget will prevent you from going overboard on gift giving.
  • Spending more than 5% on clothing. More than a few of the wealthy in my study had the Rich Habit of buying the bulk of their clothes at goodwill stores. Many Goodwill stores sell high quality clothing at a deep discount. It may require spending a few more dollars on a tailor, but it’s well worth the additional cost.
  • Spontaneous spending is never a good idea. You need to take the emotion out of your spending habits. There is always time to plan and shop before your spend your hard earned money.
  • No savings process. If you don’t save systematically it’s almost impossible to save enough money. Enough money means having a six-month safety net for emergencies as well as enough money so that you can be financially independent when you retire.
  • Uneducated risk taking. When the rich invest they do their homework. They study what they are investing in, ask questions, evaluate the feedback they receive on those questions and have a well-defined exit strategy for their investments. Those who take uneducated risks, don’t do their homework. They invest based on emotions or the opinions of family, friends, co-workers, or acquaintances. Those who invest their money this way take on unnecessary risk and almost always lose their money int he process.
  • Eating too much junk food. According to research conducted by the USDA, eating healthy is actually less expensive than eating fast food or junk food. Junk food, the USDA found, is not only more expensive than healthy food, it is far less nutritious. Worse, eating too much junk food (more than 300 junk food calories a day) can lead to heart disease, diabetes, neurological disorders and cancer.
  • Want spending. Want spending will put you in the poor house. Want Spenders spend more money than they make, on their wants. They surrender to instant gratification, eschewing saving in order to buy things they want now: 60 inch TVs, nice vacations, expensive cars, bigger homes and jewelry. Want Spenders pay a premium for what they want in order to get it immediately. Worse, they incur debt in order to finance their want spending.
  • Frugal spending vs. cheap spending. Being frugal is very different from being cheap. Cheap spending means spending money on the cheapest product or service available. Being cheap is a Poor Habit because quality is very rarely given any consideration at all. You need X, so you look for the cheapest X you can find. Being cheap is one of those taxes the poor pay that the rich don’t. Cheap products break or deteriorate at a much quicker rate than quality products.. Frugal spenders, on the other hand, buy quality items or services at bargain prices. They delay purchases until they are able to find what they want at a discounted price. Quality products can last a lifetime, meaning you don’t have to spend money to replace what doesn’t break or deteriorate.


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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,, India TV, 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,,, and the Huffington Post. Tom is a frequent contributor to Business Insider,, 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.
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