We all have habits and they are so easy to form. A habit is defined as a settled or regular tendency or practice, especially one that is hard to give up. Morning coffee, Church on Sunday, reading before bed, good or bad, we develop habits and they become our way of life. Sometimes forgotten or hidden in the background though are habits we form around finances. Like most habits, we don’t think about them. We just do them.
Here are three bad money habits that otherwise financially successful people make:
1. More money = more happiness
If you are driven to succeed, there is a good chance more money and income may be one of your goals. The pursuit of money is often worshipped in our culture and people are validated by their earnings and income. While money can buy many things, happiness is not one of them. Psychology Today claims that the extent of happiness coming from money is limited to basic and essential needs for you and your family. Once those are satisfied, money’s ability to “create” happiness is quickly diminished.
At what point then does money no longer buy happiness? The research in Psychology today points to what we know already know in the Bible. In 1 Timothy we learn a couple key lessons. As Christians, we are called to provide for our family. 1 Timothy 5:8 says, “But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever”. But then we are also warned in 1 Timothy 6:10 that the “love of money is a root of all kinds of evil.” Further Luke 12:15 we are told to “Take care and be on your guard against all covetousness, for one’s life does not consist in the abundance of his possessions.” When we begin to worship money and gaining it starts to supplant those things that bring us true happiness, like our relationships with God and family.
2. Living without a budget
Not all financially successful people have a budget. You may have no debt, solid income and have a well-funded savings and/or retirement account, so why would you need a budget? Aren’t budgets only for people trying to get out of debt? The answer is No!
Creating and living on a budget gives you control over your finances and your future. A budget is an intentional decision on how you plan to spend, save and give of the resources God has given you to be a steward over. Without having this plan in place, those resources often find a way to go their own way – without any thought to your values or vision for the future. Regardless of what we earn, we are called by God to manage those resources and not let them manage us. We don’t all receive the same gifts from God but we are all called to steward those that are entrusted to us. These gifts include our earnings and also our talents and abilities.
3. Accepting Debt as a way of life
Debt is marketed and viewed by some as an acceptable means to an end but those ends are often not what we expected. Debt can get you that new car now, that vacation now, the furniture that you always wanted and on and on and on. Eventually, debt catches up to you and those material ends turn into financial ruin. Financial ruin does not necessarily mean bankruptcy. Financial ruin is also spending years or a lifetime of making interest payments and becoming a slave to the lender (Proverbs 22:7).
The average amount an American spends on interest payments over a lifetime is estimated in a report by credit.com as $280,000. Over 40 years, this is $7000 per year on average. If half of this money was invested instead of being spent on interest payments over 40 years (at 10% interest) it would be worth $1.7 million! Don’t accept debt, get rid of it and start investing.
Financial success can be defined in many ways and there are varying degrees of what we consider to be successful in those definitions. However, even the most successful person can struggle with their relationship with money in one way or another and get into the above bad habits. To help you and your family steer clear of financial pitfalls our stewardship team welcomes you to sign up for one of the classes. Check out our Stewardship page for our latest events and classes and break some of these bad habits!