The 7 Habits of Poor Money Managers (And How to Change Them)

Image by Kirill Averianov from Pixabay

A Brief History

I didn’t grow up in a wealthy family, although fair-weather friends and acquaintances have mistakenly assumed this over the years. Born to a stay-at-home Cuban immigrant and an American-born local government worker, I had a rather luxurious childhood—or so I thought. My parents owned their home in a suburb of Los Angeles county, we had a good-sized backyard, and the house itself could accommodate a growing family (which included myself and two brothers). I ate three meals a day, had plenty of toys, and never felt deprived of any material things. When I became an adult, I was afforded shocking insight into the true nature of my childhood: it was one of pinched pennies, thrifted goods, and all manner of hand-me-downs.

Meeting Claire

When I met Claire shortly after graduating high-school, I was mesmerized. Claire was also a first-generation child, born to parents who, like my own, were neither college graduates nor family-wealthy. Claire’s parents had saved to get into their home where she, her mother and father, and her grandmother all lived together. Claire had not attended my high-school—she was from a neighboring city—but we were near the same age and worked for the same company.

The Seven Habits of Perpetually “Poor” People—and How to Fix Them

1. Not tracking income and outflow

Claire and I earned nearly an identical amount as supervisors—in fact, with slightly more tenure, she earned more. Without organizing her spending and saving habits, however, Claire’s checks quickly vanished to pay various expenses—expenses that were not documented anywhere but in her mind. A statistics professor once said to our class, “if you can’t define it, you can’t control it.” While this was in the context of experimental research, it certainly applies to financial income as well—simply substitute “define” for “organize.”

2. Kissing every paycheck goodbye

Claire thought that she was only spending 100% of her paycheck every two weeks, but because she had debt, this was not the case. What qualifies as debt (besides the obvious)? Car payments, car insurance, monthly subscriptions, credit card payments, phone bill, rent, student loans—anytime that you are obligated to spend money each month because of a contracted service or product, you are indebted. Even if you pay off all of your bills every month, if the amount that you have in savings is not equal to or greater than at least one full month’s cost of bills, you are overextended. In other words, if you pay $1000 in bills per month, but do not have at least $1000 in your immediate savings, you are spending more than you can afford—one missed paycheck and your lifestyle becomes immediately unsustainable. This is known as living “paycheck to paycheck,” and the stress of this lifestyle can often create a significant amount of mental and physical anxiety.

3. “I have the money” = “I can afford it”

Claire was correct in thinking that her money was her money, and she could do with it as she pleased. Spending was totally her right and privilege—or was it? Surprisingly, not quite. Claire’s spending habits actually were costing other people money in unexpected ways.

4. Not budgeting—but pretending to!

Claire used budgeting as a very flexible, multi-purpose verb in her vocabulary. For Claire, “it’s in the budget” meant that she had just checked her Chase app and seen that she had enough money to make the purchase. This is not an accurate representation of what “budgeting” is, and many people tend to miss this very functional tool that can completely transform their finances!

5. Scorning the small bills

Claire’s spending habits weren’t obviously outrageous to the outside world. She didn’t drive a particularly flashy car, nor did she adorn herself with fancy jewelry or expensive purses. Claire’s spending was much more insidious—it was the repeated dropping of small amounts of cash.

6. The insidious “easy come, easy go”

Claire was always under the impression that she was “supposed” to spend money. I blame American consumerist culture for this in large part, as well as the American school system. Working has become culturally ingrained as what you’re “supposed to do” with the majority of your time—as natural as breathing, or pooping! You work, you earn, you spend, and the cycle continues—and Claire was no exception. Exhausting a lifetime working and spending, however, is not the only lifestyle available to humanity. Unfortunately, it’s the only lifestyle that has been widely popularized by the machine of modern civilization.

7. “I want it, I got it.”

Claire has never been a big fan of Ariana Grande, but if there’s one thing that two have in common, it’s their spending habits. The big difference is, one of them can afford a life of extravagant impulse purchases, and the other cannot. Much like the mentality described in item #3, Claire lives under the impression that if she desires something, and she has (or will foreseeably have) the money to purchase it, it is her right and privilege to purchase it. Whether that “thing” is a $15 meal, a $26,000 car, or a $1000 iPhone—if Claire wants it, Claire gets it.

The Aftermath

So what ever happened to Claire? Ten years after our first meeting, does she still live with her parents? Did she ever manage that on-location wedding? Does she still have a lot of technological gadgets and gizmos and no time to use them? Well, it’s time for a confession: Claire isn’t real—at least, not in the sense that she is a singular person. Instead, Claire is the amalgamation of many, many people I’ve known and loved over the years—including myself!



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Amanda Dollinger

Amanda Dollinger

The highest purpose of words is that they be used to connect one another.