Many people struggle with money, not because they don’t earn enough, but because of the habits they practice daily. Incorrect financial habits can quietly drain your income, hinder growth, and leave you stressed.
In this guide, we’ll reveal 10 common money habits that keep you poor, and most importantly, how to replace them with practical, actionable strategies. By the end, you’ll know exactly what to stop doing — and what to start — to improve your financial life.
1. Falling for Lifestyle Inflation
As income grows, spending often rises even faster. Buying luxury items or upgrading your lifestyle too quickly can harm your financial progress and derail your goal of achieving financial freedom. Luxury isn’t inherently bad, but indulging in it too early during your wealth-building phase can slow your path to independence and keep you trapped in the poverty cycle.
How to fix it:
- When income increases, increase savings first, not lifestyle.
- Use the 50/30/20 scaling rule: allocate raises to savings, investments, and only a small portion for luxury.
- Example: If your salary rises by ₦20,000, invest ₦10,000, save ₦5,000, and spend ₦5,000 on wants.
2. Avoiding Financial Education
This habit is often overlooked by many, not realizing it’s what is keeping them trapped in the poverty cycle. Building wealth starts in the mind — a single mindset shift can elevate your financial life. Wealth creation is a skill, and like any skill, it must be learned. The good news is that you don’t need to break walls or have huge resources; you simply need to train your mind.
Neglecting financial education is a silent wealth killer. People repeat the same mistakes because they don’t understand the basic principles of money management, budgeting, saving, or investing. Learning how money works is the first step toward breaking out of poverty and building lasting wealth.
How to fix it:
- Read blogs like FundLume, book, e., Rich Dad Poor Dad, Atomic Habits, Think And Grow Rich, or listen to finance podcasts.
- Learn about budgeting, investing, inflation, and interest rates.
- Apply knowledge practically — learning without action doesn’t create wealth.
3. Ignoring Hidden Expenses
Hidden expenses like subscriptions, small ATM charges, and convenience fees can quietly drain your income. Many people don’t notice the impact until it’s too late.
For example, you might subscribe to a data plan to access the internet for learning or connecting with business partners. However, if you end up scrolling aimlessly or using the data for non-productive purposes, your subscription runs out faster than expected. This forces you to spend again on a new bundle, wasting both money and time — and time is a valuable asset.
How to fix it:
- Audit your accounts monthly to spot hidden or recurring charges.
- Cancel unused subscriptions and reduce unnecessary fees.
- Use mobile banking alerts to monitor expenses in real time.
- Taking breaks to chat with friends or have fun online is fine, but avoid overdoing it — stay focused and productive.
Example: Canceling 4 forgotten apps could save ₦5,000–₦10,000 per month, which can then be redirected toward savings or investments.
4. Ignoring Micro-Investing Opportunities
Keeping cash idle causes it to lose value over time due to inflation. Many people avoid investing because they believe it requires large capital — but that’s a myth. Waiting until you “have enough” to invest often leads to never investing at all, especially in a world full of uncertainties. With rising inflation, accumulating a large sum before investing is becoming increasingly difficult, making early action even more critical.
How to fix it:
- Use apps like Rise, Trove, Chaka, or PiggyVest Smart Savings.
- Start with as little as ₦1,000–₦5,000 monthly.
- Track returns and reinvest.
Insight: Micro-investing regularly beats sporadic large investments. Even small amounts compound over time
5. Emotional Spending
Spending out of boredom, stress, or social pressure is a common money trap. Many impulse purchases happen not because of necessity, but because of emotions — fear of missing out, envy, or even temporary relief from stress. Over time, these small, unplanned expenses quietly add up, keeping you from saving and investing effectively.
How to fix it:
- Implement the 24-Hour Rule: Wait at least one day before buying non-essential items. Often, the urge to spend fades once you step back and evaluate.
- Identify emotional triggers: Recognize what drives your spending — social media, peer pressure, boredom, or stress. Awareness is the first step to control.
- Replace spending with low-cost alternatives: Channel your energy into productive or relaxing activities like a walk, reading, learning a new skill, or a side project. These substitutes satisfy your emotional needs without hurting your finances.
- Plan your discretionary budget: Allocate a small, fixed amount for leisure spending each month. This allows enjoyment without guilt or overspending.
Example: Instead of spending money to upgrade your phone because of peer pressure, like keeping up with iPhone trends, lock that money in a savings app. Over time, you’ll accumulate more wealth instead of spending lavishly.
6. Avoiding Debt Management
Debt isn’t inherently bad, but unmanaged debt is dangerous. For example, in the book Making It Big, successful Nigerian entrepreneur Femi Otedola shared how he owed significant amounts early in his career. Instead of letting it break him, he leveraged debt smartly to grow his business.
Many people ignore small debts, letting interest accumulate silently. The key is to see debt as a tool and manage it carefully, no matter how small.
How to fix it:
- List all debts along with their interest rates.
- Use the debt snowball or avalanche method to pay them off strategically.
- Only take loans when necessary and always have a repayment plan.
- Real-life tip: Paying just ₦5,000 extra monthly on a high-interest loan can save thousands of naira in interest over 6–12 months.
7. Excessively Eating Out
Eating out frequently might feel convenient or even enjoyable, but it’s one of the silent drains on your finances. From daily snacks and street food to frequent restaurant meals, these small, repeated expenses quickly add up, leaving little room for savings or investments. Many people don’t realize how much of their income is going toward food outside the home until they track it.
Beyond money, eating out excessively can also lead to poor health, which might result in additional medical expenses over time — another hidden cost.
How to fix it:
- Plan meals in advance: Preparing meals at home saves money and ensures healthier options.
- Set a budget for eating out: Allocate a fixed monthly amount for dining and stick to it.
- Cook in batches: Prepare meals for the week and store them. This reduces impulse spending on food.
- Combine socializing with cost-effective options: Instead of expensive restaurants, meet friends at home or for low-cost outings.
Example: If you spend ₦1,500 daily on lunch, cutting it down to ₦500 by cooking at home could save ₦30,000 a month — money you can redirect toward savings or investments.
8. Poor Networking
Many people underestimate the power of networking in building wealth. Limiting yourself to only familiar circles or ignoring professional relationships can slow career growth, business opportunities, and financial progress. In today’s world, connections often open doors that skills alone can’t.
Poor networking can mean missing out on mentorship, partnerships, job opportunities, or even investment advice. It’s not just about meeting people — it’s about building meaningful, mutually beneficial relationships that can help you grow financially and professionally.
How to fix it:
- Attend events and workshops: Look for seminars, webinars, or industry events relevant to your goals.
- Engage online strategically: Use LinkedIn, professional groups, or social media communities to connect with like-minded individuals.
- Offer value first: Help others with advice, resources, or introductions before expecting anything in return.
- Maintain relationships consistently: Check in, celebrate successes, and stay in touch even when you don’t need anything.
Example: Connecting with a mentor or experienced professional could give you insights into a profitable side hustle or investment opportunity you wouldn’t have discovered alone. Even a single well-placed connection can save you months of trial and error and potentially thousands of naira.
9. Procrastinating on Actionable Habits
Knowing what to do is one thing, but actually taking action on personal finance tips is what drives real results. Many people understand the steps they should take to improve their finances — like budgeting, saving money, or investing — but keep putting them off, thinking, “I’ll start tomorrow.” This procrastination, even with small habits, can stall financial progress, allowing bad spending patterns and unproductive habits to persist.
In a world of rising inflation and unexpected expenses, delaying action on wealth-building habits can be costly. The key to achieving financial discipline and long-term growth is to start today, no matter how small the step. Consistent action compounds over time, turning even modest savings or smart investments into meaningful wealth.
How to fix it:
- Start small, start today: Automate a small savings amount, track expenses, or begin a micro-investment.
- Break goals into manageable steps: Instead of “save ₦100,000 this year,” focus on saving ₦8,500 per month.
- Set reminders and accountability: Use apps, notes, or a trusted friend to keep you on track.
- Review progress regularly: Weekly check-ins help reinforce habits and identify areas for improvement.
Example: Instead of waiting until next month to save, set up an automatic transfer of ₦1,000–₦5,000 into a PiggyVest or Kuda savings plan today. In six months, that small, consistent action can grow into a meaningful financial cushion, proving that taking action now beats planning indefinitely.
10. Falling for Get-Rich-Quick Schemes
Due to a lack of financial education, many people are tempted by promises of fast wealth — from online investment scams to dubious business opportunities — thinking they can multiply their money overnight. Falling for these get-rich-quick schemes is one of the fastest ways to lose savings and derail long-term financial goals. Scammers often target young professionals or first-time investors, exploiting the desire for quick returns instead of promoting financial discipline and sustainable wealth-building habits.
The problem isn’t ambition — it’s impatience and poor financial planning. Real wealth takes time, strategy, and consistent action. Jumping into risky schemes without understanding them can lead to significant losses, debt, and frustration.
How to fix it:
- Do your research: Verify the legitimacy of any investment or business opportunity. Check reviews, regulatory approvals, and track records.
- Focus on long-term wealth-building: Prioritize savings, low-risk investments, and proven financial strategies over shortcuts.
- Start small: If exploring a new investment, use only a small amount you can afford to lose while learning the ropes.
- Seek advice: Consult financial experts or trusted mentors before committing to unfamiliar opportunities.
Example: Instead of investing ₦50,000 in an unverified online scheme promising 50% returns in a month, put that money into a diversified investment app like Trove, Rise, or mutual funds. Over time, consistent returns from safe investments compound into real wealth without unnecessary risk.
Summary
Understanding “10 Money Habits That Keep You Poor” is the first step toward taking control of your finances. Mastering your money isn’t about luck — it’s about building smart money habits, staying disciplined, and taking consistent action. Avoid common traps like lifestyle inflation, emotional spending, ignoring debts, and falling for get-rich-quick schemes. Focus on saving, investing, tracking expenses, and financial education to break free from the poverty cycle and steadily grow wealth. Small, consistent steps compound over time, turning mindful money choices into long-term financial freedom.