With the rising cost of groceries, rent, gas and basically everything it seems almost impossible to get ahead. Even with a salary raise it felt like things were still getting more expensive. There was never a right time to invest more or save more. Many people like myself are unknowingly sabotaging their financial well-being through seemingly harmless habits. Here are the top habits that were holding me back and how I made improvements.

1. Living Beyond Your Means

It’s so easy to get caught up in lifestyle inflation—you earn more, so you spend more. But that cycle is a trap, and it keeps you broke.

One day, I sat down and looked at my bank statements. The amount I spent on things I didn’t even need was embarrassing. The other big way I was living beyond my means was excessive travel. I mean, almost every month there was a weekend trip or getaway outside of the city.  So, I started cutting back, making a budget, and learned to say no. The first step is figuring out where you spend excessively. It wasn’t easy at first, but once I saw the savings stack up, it felt like a huge weight off my shoulders. It’s a simple but powerful habit to live below your means. You don’t need everything you think you do.

2. Neglecting a Budget

Budgeting sounds so boring, honestly, most of the time it is. I’d tell myself, “I know how much I’m spending. I’m fine.” I was just guessing and was way off. I was always surprised by how much money I didn’t have at the end of the month. It was a mess. So, one day, I decided to actually sit down and create a budget.

I started by listing out all my expenses—rent, bills, groceries, you name it. I realized that all those little “extras” were adding up fast. It helped me understanding where my money was going. It also helped me find places to save. I also found several subscriptions I had stopped using but unknowingly still paying for.

3. Relying on Credit Cards

Credit cards are my go-to for everything. Need groceries? Swipe the card. Want to grab dinner with friends? Swipe again. Honestly, they still are because they’re so convenient and of course the points.

I won’t go far as to say to stop using them if you’re able to pay the bill monthly. Of course, if you’re accumulating a lot of debt and paying interest then I would definitely switch to cash or debit card. However, to avoid charging too much on my credit card I do make a mental note of my spending limit of the money and check my balance at least in the middle of the month. If I find that I’m getting close to the limit it just means that we’ll be having home cooked meals and entertainment at home until next month.

4. Not Saving for Emergencies

Starting an emergency fund wasn’t as hard as I thought, however, it did take me a while to start one. I began by setting aside just $100 a month. It wasn’t much, but over time, it added up. And when the next surprise expense came around, I was ready. Having that cushion made all the difference. So, if you’re not saving for emergencies, start now, even if it’s just a little bit. It’ll save you a lot of headaches down the road.

5. Procrastinating Financial Decisions

This is one I’m still working on. I think the combination of the time commitment it takes to actually login to all your accounts, make calculations and commit to making money transfers always seems so daunting.  It took me almost a year to open a savings account and I had no idea what my 401k contributions at my job were for almost 2 years. I always found an excuse to put it off. It’s like I knew what I had to do, but I just didn’t want to face it. Often it meant I had to do a lot of reading to increase my financial literacy and there was always something else to do.

I had been putting off rolling over an old health saving account for months. It seemed like such a hassle, and I kept telling myself it could wait. When I finally logged in, I realized I was paying an additional $30 a month just to keep it in that account. That was money I was losing just because I had procrastinated. When I finally did it, I realized how simple it was—and I was kicking myself for not doing it sooner. Now, I try to tackle financial tasks as soon as they come up. It’s not always fun, but it’s a whole lot better than the stress of having things hanging over your head.

6. Ignoring Investments

For the longest time, investing seemed like something only rich people did. I didn’t think I had enough money to start, and I was scared of losing what little I had. So, I ignored it. I figured I could just save my way to a comfortable future. But the truth is, without investing, the money you make just sits there, and inflation slowly eats away at it.

I finally started actually with a financial advisor because it was all so overwhelming. Once I starting feeling less scared and educating myself, I started DIY investing on my own with index funds. They’re low-cost and pretty straightforward. It wasn’t about making a quick buck; it was about playing the long game. And as I learned more, I got more comfortable with it. Looking back, I wish I’d started sooner. Eventually, I transferred all the money I had with the financial advisor to my own  account where I had full control and didn’t have to pay extra fees.

7. Not Setting Financial Goals

Setting financial goals always seemed like one of those things that sounded good in theory but didn’t really apply to me. I figured I’d just take things as they came. But without a goal, you’re basically just drifting. I realized this the hard way when I looked back at a year’s worth of finances and saw I hadn’t really made any progress.

So, I decided to get serious about goal-setting. I started small—like saving for a vacation—and worked my way up to bigger things like paying off debt and investing more. Having clear goals gave me something to aim for, and it made saving and budgeting feel less like chores and more like steps toward something exciting. It’s crazy how much of a difference it makes when you have a destination in mind. So if you’re not setting financial goals, start today. It doesn’t have to be complicated—just pick something, anything, and go for it.

8. Living Without Financial Education

I’ll be honest, I wasn’t exactly the most financially literate person out there. For years, I figured I could just wing it. I also didn’t have that much money, but still wish I had started sooner. It wasn’t until I started educating myself—reading books, listening to podcasts, talking to people who knew their stuff—that things started to click.

Learning about money isn’t just for financial gurus. The more I learned, the more empowered I felt to make better decisions. I didn’t need a degree in finance; I just needed to know the basics. And the best part? The more I learned, the more my bank account grew.

9. Keeping Up with the Joneses

Spending money on stuff just because everyone else has it is probably one of the worst habits keeping us from reaching our financial goals. Of course, I’ve also been guilty of this one.

One day, I realized I didn’t even like half the stuff I was buying—it was just about keeping up appearances. So, I made a conscious effort to stop caring so much about what other people had. It wasn’t easy at first, but over time, I found that focusing on what I really wanted, not what I thought I should want, made me a lot happier.

10. Failing to Automate Finances

I used to login to accounts constantly because I was so paranoid about forgetting to pay a bill. This not only wasted a lot of time but was also so unnecessary. I finally read a suggestion to automate my finances, and honestly, it was a game-changer. I set up automatic payments for my bills and automated my savings, so a portion of my paycheck was going into my savings and investments. Now, it’s money that I don’t see and therefore can’t spend.

Breaking free from the habits keeping you broke isn’t easy, but it’s definitely possible with the right mindset and strategies. The first step is to recognize what these habits are and work slowly to improve them over time.

Did you know that 63% of Americans live paycheck to paycheck? But here’s the good news: financial literacy is your ticket out of that cycle. And what better way to boost your money smarts than with some top-notch personal finance books? I’ve dived into the world of financial literature and summarized some of the best so you can start picking up one of these books right away.

Classic Personal Finance Books

“Rich Dad Poor Dad” by Robert Kiyosaki

Main Lesson: Compares two different philosophies on money from Robert Kiyosaki’s two father figures. His biological “Poor Dad” emphasizes job security and education while is “Rich Dad” and mentor advocates financial independence through understanding money, investing and entrepreneurship. The book encourages making money work for you rather than working for money. It highlights that the key to building wealth is by building assets (like rental properties, stocks, businesses) and minimizing liabilities (like fancy cars and big homes) as the key to achieving wealth and financial freedom.

“The Total Money Makeover” by Dave Ramsey

Main Lesson: Great book to eliminate debt. Dave highlights a step-by-step plan to get out of debt and build wealth. Although sometimes taking extreme measures, the main takeaway is to avoid debt at all costs.

Best Books for Budgeting

“You Need a Budget” by Jesse Mecham

Main Lesson: This book emphasizes the importance of giving every dollar a job. The four key rules are to prioritize your expenses, adjusting your budget, save for larger, irregular expenses, and learn to live on last month’s income. All these rules are catered to break the paycheck-to-paycheck cycle.

“The Simple Path to Wealth” by JL Collins

Main Lesson: This is one of my favorite intro books for investing in the stock market. JL Collins focuses on investing in low-cost index funds and just doing that for the long-term to eventually see growth in the market. These low-cost investment option are perfect for minimizing fees and achieving financial freedom.

Investing 101 Books 

“The Little Book of Common Sense Investing” by John C. Bogle

Main Lesson: This book is similar to “The Simple Path to Wealth” so I would suggest reading one or the other if you’re short of time. Bogle emphasizes that most active investors (like any financial advisor that you might hire) underperform the market due to high fees and frequent trading. He recommends a similar approach to JL Collins by investing in a diversified portfolio of stocks that track the market as a whole. It is probably the most passive approach to investing by capitalizing on the power of compounding returns and minimizing costs.

“The Intelligent Investor” by Benjamin Graham

Main Lesson: Similar to the other investing books the focus is on long-term investing. The biggest takeaway here is more on the mindset of investing and importance of maintaining emotional discipline to achieve consistent returns. The stock market is inevitability volatile and its important to have a game plan to protect against long-term losses.

Personal Finance Books That Focus on Mindset

“Think and Grow Rich” by Napoleon Hill

Main Lesson: Good lessons on changing your beliefs about money. It emphasizes the power of thoughts and beliefs to wealth creation, advocating for a positive mental attitude, clear goals, and persistence. There are 13 key principles that he talks about, including desire, faith, and specialized knowledge to achieve financial goals

“The 4-Hour Work Week” by Tim Ferriss

Main Lesson: Great book in showing you have to work smarter not harder. The main ideas include outsourcing, and automating income. It challenges you to think about what a career and retirement means and instead designing a life and work around your goals. A key takeaway is this idea of “mini” retirements, which means taking several months off to travel or change jobs that are more aligned with your desired lifestyle.

“The Psychology of Money” by Morgan Housel

Main Lesson: Wealth is dictated more by behavior and decision-making than specific knowledge or skills. The book argues that understanding our own psychology and biases is crucial for making better financial choices and achieving long-term wealth.

“I Will Teach You to Be Rich” by Ramit Sethi

Main Lesson: Geared toward those individuals early in their career and focuses on automizing everything. This includes savings, investing and money management. Ramit’s main message is to spend extravagantly on the things you love while cutting back in other areas that are less meaningful to you.

There you have it – 10 of my favorite personal finance books. Whether you’re drowning in debt, dipping your toes into investing, or aiming to build generational wealth, there’s a book on this list for you. Remember, reading is just the first step. The real changes happen when you apply these principles to your everyday money decisions.

F.I.R.E. stands for Financial Independence, Retire Early. It’s a lifestyle movement and financial strategy that aims for achieving financial independence and retiring from traditional employment at an early age, typically in one’s 40s or 50s.

The F.I.R.E. movement emphasizes aggressive saving, frugality, and smart investing to accumulate enough wealth to sustain a comfortable lifestyle without relying on traditional employment.

Key principles of the F.I.R.E. movement include:

1. Financial Independence: The primary goal is to reach a point where one has accumulated enough assets and investments to cover living expenses without the need for active employment.
2. Early Retirement: F.I.R.E. enthusiasts aim to retire earlier than the traditional retirement age, often in their 40s or 50s. This early retirement is made possible by disciplined saving and strategic financial planning.
3. Frugality: F.I.R.E. followers often embrace a frugal lifestyle, focusing on minimizing unnecessary expenses and maximizing savings. This involves conscious spending, budgeting, and avoiding debt.
4. Investing: Smart investing is a crucial component of the F.I.R.E. strategy. Followers typically invest in a diversified portfolio of assets, such as stocks, bonds, and real estate, to grow their wealth over time.
5. Side Hustles: Many in the F.I.R.E. community explore side hustles or alternative income streams to accelerate their journey to financial independence.

It’s important to note that the F.I.R.E. movement is not a one-size-fits-all approach, and individuals may tailor it to their own circumstances and goals. While some people fully retire early, others pursue semi-retirement or choose to work on projects they are passionate about without financial stress.

The F.I.R.E. movement has gained popularity in recent years, driven by individuals seeking greater control over their time and financial independence. However, it also has critics who argue that achieving extreme early retirement may not be feasible or desirable for everyone.

Why do people want to do F.I.R.E.?

People pursue Financial Independence, Retire Early (F.I.R.E.) for various reasons, and motivations can differ among individuals. Here are some common reasons why people are drawn to the F.I.R.E. movement:

1. Early Retirement: The desire to retire at a younger age is a primary motivation. F.I.R.E. followers aim to achieve financial independence, allowing them to retire in their 40s or 50s and enjoy more years of leisure or pursue activities they are passionate about.
2. Freedom and Flexibility: F.I.R.E. provides individuals with the financial freedom to make choices based on personal preferences rather than financial necessity. This includes the flexibility to choose work that aligns with their interests or take breaks without the fear of financial instability.
3. Escape from Traditional Employment: Some people are dissatisfied with the constraints and demands of traditional employment. F.I.R.E. allows them to break free from the typical 9-to-5 routine and explore alternative lifestyles or pursue entrepreneurial ventures.
4. Focus on Personal Goals: Achieving financial independence enables individuals to prioritize personal goals and pursuits. Whether it’s traveling, starting a business, or dedicating time to family and hobbies, F.I.R.E. provides the means to focus on what matters most to them.
5. Reduced Stress: By achieving financial independence, individuals can reduce financial stress and anxiety. Knowing that they have the financial means to cover living expenses without relying on a paycheck brings a sense of security and peace of mind.
6. Emphasis on Quality of Life: F.I.R.E. is often associated with a minimalist and frugal lifestyle. People pursuing F.I.R.E. may prioritize experiences and relationships over material possessions, emphasizing a higher quality of life and well-being.
7. Break from Consumer Culture: F.I.R.E. encourages a shift away from excessive consumerism. Followers may choose to live more sustainably, consume mindfully, and prioritize experiences over material possessions.
8. Financial Security: Building a significant financial cushion provides a safety net against unexpected expenses, economic downturns, or health-related challenges. F.I.R.E. advocates for a level of financial security that goes beyond typical emergency funds.
9. Passion Projects: With financial independence, individuals have the freedom to pursue passion projects, creative endeavors, or charitable activities without the constraints of financial obligations.

It’s important to note that while F.I.R.E. offers benefits, it may not be suitable for everyone. The path to early retirement often involves sacrifices, discipline, and careful financial planning.

Additionally, personal values and priorities vary, so individuals should evaluate whether the F.I.R.E. lifestyle aligns with their own goals and aspirations.

Embarking on the journey to buy a car is an exciting endeavor, but it requires careful financial planning, especially when it comes to saving for a down payment. Whether you’re eyeing a sleek sedan or a reliable SUV, here’s a comprehensive guide to help you save for that crucial down payment.

Assess Your Budget:

Before diving into the world of car savings, take a closer look at your budget. Understand your monthly income, expenses, and discretionary spending. Identifying areas where you can cut back will free up funds for your down payment savings.

Set a Realistic Goal:

Determine the amount you need for a down payment based on the car you want and your financial capacity. A common target is 10-20% of the car’s purchase price, but the specific amount depends on your budget and the loan terms you’re comfortable with.

Open a Dedicated Savings Account:

Separate your car savings from your regular funds by opening a dedicated savings account. This not only streamlines your tracking but also helps prevent using the money for non-car-related expenses.

Create a Monthly Savings Plan:

Establish a systematic approach to your savings by creating a monthly plan. Calculate how much you need to save each month to reach your down payment goal within your desired timeline. This disciplined approach ensures consistent progress.

Cut Unnecessary Expenses:

Review your monthly expenses and identify areas where you can cut back. Whether it’s dining out less frequently, canceling subscription services, or finding more cost-effective alternatives, redirecting those savings towards your car fund accelerates your progress.

Explore Additional Income Streams:

Boost your car savings by exploring additional income streams. This could involve taking on a part-time job, freelancing, or selling items you no longer need. Every extra dollar contributes to reaching your down payment goal sooner.

Take Advantage of Windfalls:

Apply unexpected windfalls, such as tax refunds, work bonuses, or monetary gifts, toward your car fund. These lump-sum contributions provide a significant boost, helping you achieve your down payment goal more quickly.

Monitor Your Credit Score:

Maintaining a healthy credit score is crucial when financing a car. Regularly monitor your credit score and take steps to improve it if necessary. A higher credit score may qualify you for better loan terms and lower interest rates.

Be Patient and Flexible:

Saving for a car down payment is a gradual process. Be patient and flexible with your timeline. If unexpected expenses arise, adjust your plan accordingly. The key is to stay committed to your goal while adapting to life’s uncertainties.

Research Financing Options:

As you approach your down payment goal, research financing options to understand the loan terms and interest rates available to you. Being informed allows you to make confident decisions when the time comes to purchase your car.

Saving for a car down payment requires strategic planning, discipline, and a clear understanding of your financial situation. By following these steps, you can confidently work towards your goal of owning the car of your dreams. The road to ownership begins with careful financial navigation, and your down payment savings pave the way for a smoother journey.