I want to talk about the money habits I grew up with that were actually holding me back from building wealth. These are nine lessons that took me over a decade to learn, and I’m sharing them to help you shortcut your way to financial success. Without further ado, here they are.
- Focusing on Making More Money Instead of Growing Wealth
Many of us were raised to believe that the key to financial success is making more money. But without proper money management, earning more often leads to spending more. Instead, focus on managing what you already have effectively so that when you do increase your income, it contributes to wealth-building rather than just covering a more expensive lifestyle.
- Funding Your Lifestyle with Debt
I grew up seeing people use debt—especially credit cards—to afford a certain lifestyle. But even today, I have an acquaintance that took two years to pay off a Disney vacation. A true wealth-building mindset means ensuring that your purchases, from everyday items to vacations, are fully paid for at the time you acquire them. Debt should be reserved as a financial tool that helps you further your long-term goals.
- Using Credit Cards as an Emergency Fund
Now please don’t take point 2 to feel like judgement. I get that some folks are trapped with debt and are looking for a way out. A perfect example of this is when you have to use your credit card to make ends meet because of an emergency. For many years, I believed that was the purpose of credit cards. I believed that they were a necessary safety net for emergencies. However, true financial security comes from having an actual emergency fund. Again, credit cards should be a tool in your financial toolbox, not a fallback for unexpected expenses. This is one of the toughest cycles to break, and I work on it with nearly ever financial coaching client that I take.
- Confusing Liabilities for Investments
Many middle-class families consider their home or even a car as an investment. But unless something generates income or appreciates in value without ongoing costs, it’s not an investment. For example, your primary residence is not an investment unless you are willing to sell it to get the money out. When we first bought our home in Colorado, I thought it would be my forever home. With that in mind I never considered it an investment. However, once we decided to relocate to Missouri it absolutely was an investment. We were able to take 7 years of appreciation out of it and that helped us pay for our current home and our first investment property. Incidentally, you can go here to learn how we got our second investment property.
- Not Designing a Vision for the Future
One of the biggest mindset shifts I had was recognizing that a “default future” (where life just happens to you) isn’t the same as designing the life you truly want. Take the time to dream, plan, and actively work toward a future that excites you. This has major implications for how you handle your money.
- Believing Retirement is an Age, Not a Number
Most people assume retirement happens at 65, but financial independence is really about hitting a number—how much you need saved or invested to cover your expenses indefinitely. Learning this from financial independence advocates like Mr. Money Mustache helped me reshape my approach to wealth-building. Learn more about the Financial Independence for Retire Early movement here.
- Avoiding Conversations About Money
Money was often considered a taboo topic in my upbringing. But when I started working with wealthy individuals, I realized they openly discussed money—investments, strategies, and wealth-building opportunities. Talking about money leads to financial literacy and opens doors to new opportunities. This is part of my mission – I help people talk about money in their marriages, their social circles, and within their businesses.
- Believing That “If It’s Cheap, I Can Afford It”
Buying cheap, low-quality items because they seemed affordable often led to spending more in the long run. The “Boots Dilemma” explains how buying inexpensive, poor-quality items can end up costing more over time than investing in durable, high-quality alternatives from the start. Check out this Wikipedia page that clearly explains the dilemma. Ultimately though, it comes to recognizing the power of buying less and buying better. I have come to revel in the power of having fewer things – but those things are of amazing quality. In my corresponding YouTube video (linked below) I share the story of my bedroom furniture. A serious lesson learned there!
- Letting Lifestyle Inflation Eat Away Gains
Every time someone in my family got a raise, their lifestyle would inflate to match it. The key to wealth-building is maintaining or even lowering your expenses while increasing income, allowing the gap to widen in your favor.
Final Thoughts
These nine habits kept me from growing my wealth until I recognized and changed them. I hope sharing these insights helps you take a more strategic approach to your finances. Let me know in the comments which of these habits you’ve experienced and what changes you’ve made toward financial independence!
