And one of the most life-changing skills I have learned through it all is how to handle my own finances, recognize my bad money habits, and break free from them.

So, in this video, I'm going to share with you nine of the most common bad money habits that hold people back and tips on how to break out of them.

Number one, paying yourself last.

I first heard of this in the book "Rich Dad Poor Dad" by Robert Kiyosaki, and it's one of the blueprints in achieving financial freedom.

Robert explains that the way people pay their bills can be broken down into two types.

The first way is the poor people's habit, and that is through paying yourself last.

So, as soon as your paycheck comes in, you then pay your rent, your phone bill, your subscriptions, you find your social plans,

and then you'll save whatever's left over⏤if there is even any money left to save.

The second method he talks about is the rich people's habit, and they do the complete opposite.

They pay themselves first, and that is what you want to do.

Take 10%, minimum, and put that into your savings account the minute you get paid⏤treat it like paying a bill.

This is so important and, by doing this, you're guaranteeing that that money will be saved and won't just slip through your fingers through spending.

A lot of people are probably thinking, "There is no way I can do this; I live paycheck to paycheck."

But the surprising thing is when you take that 10% and put it away,

your mind will think of ways and structure your spending and structure your finances to last for the whole month.

And you won't even realize that you're saving in the background.

People don't realize how much they're spending on paying the bills, buying something new, going on that weekend away, and then they save whatever is left.

But that's the backwards mentality.

The key is to pay yourself first instead of making other people richer by buying their things before you pay yourself.

The second bad money habit is getting comfortable with bad debt.

It seems that debt these days is actually the norm.

People are using debt to buy the smallest of things⏤to buy presents, to buy clothes.

I have a straight rule, that is, unless I can afford to pay for that thing outright in cash, I shouldn't be buying it with any form of debt.

Remember, credit card companies want you to be bad with your finances because that's how they make money from this.

The average credit card interest rate is 22%, which cancels all kinds of benefits and rewards these credit card companies are providing if you're not able to pay them off in time.

... is not having a stockpile.

This ties into point number one, which is about paying yourself first.

And, essentially, it's saving enough so that you have a buffer behind you, of about three to six months.

This is super important, and it will give you peace of mind just by having this buffer kept to one side and available to tap into if you need it.

You free up that mental energy to designate to more important things.

So, how do you gather this six months of buffer? It's through that paying yourself first.

Start putting that 10% away, and once you have your stockpile,

then you can start using the additional money you save to building into your investment fund and looking at investments.

Number four is not knowing your income or expenses properly.

Until you know what your starting point is, how do you know where you want to be?

There's something called "lifestyle inflation", and that is, your spending will rise as your income rises.

The more money you make, the more you spend, and it's a cycle.

Make more money, buy a bigger house, buy a nice car, spend more, make more.

And it's crazy how normal this is, but it is a recipe for disaster.

You want to be in control of your finances and mapping out where things are going.

A budget tracker is super important, and you want it to include how much you're making, how much you pay yourself first⏤that 10% we spoke about,

your expenses, so, your bills, your mortgage, your rent, your spending, your debt repayments, and so on.

And you want to be keeping on top of that budget tracker⏤at least every three months, set a date night with that tracker.

People who know exactly where they are financially⏤

they know their assets, they know their liabilities, they have a clear goal on where they want to go financially, and all they... all the steps they need to take to get there⏤

are more likely to get a lot of money and build wealth compared to people who just fantasize about money but have no idea how to go about it, how they plan to acquire it, or how to manage it.

Just being mindful of their stuff and seeing those numbers in black and white will trigger you into action.

Fifth bad money habit is having expensive hobbies.

A lot of people like to shop and I guess, yeah, part of this is retail therapy,

but, again, marketing, social media, and these multi-billion-pound organizations love to tell us how much we need to spend our money and spend our cash instead of keeping and investing it.

Next up, we have focusing purely on saving.

If you want to improve your financial position,

you can, firstly, save more of your existing income or you can make more money and create more income streams.

And the ideal combination is a mixture of both.

You can't build wealth if you're making more money and spending it all,

but you also can't if you're just focusing on the saving side because there is a cap to how much you can save.

Using those cashback sites will only get you so far.

So, to truly build wealth, you have to think of both sides of the equation,

both how you will save a larger percentage of your income but also how you will make more money.

Saving money side has a cap, the making money side does not, it's infinite.

There is unlimited potential upside, whether it's investing in the stock market, asking for a pay rise, starting a side hustle,

you want to break the bad money habit of thinking that saving money is going to massively increase your wealth.

Number seven, paying too much in taxes.

Taxes are going to be the single biggest expense in your life.

Whilst everyone has to pay tax, a lot of people just pay it without considering how you can legally reduce your bill.

"Legally" is the key word here.

The wealthy, they have knowledge of legal corporate structures that come with tax advantages⏤they hire tax advisors that help them minimize their tax bills.

So, if you want to get one step ahead, one of the best ways to increase your wealth is through understanding tax rules in a way that's stack up in your favor.

For example, investing through an ISA or a Roth IRA, which is an investment account that shelters your dividend and profit from taxes,

or operating under a business instead of an individual if you're a solopreneur.

All of this stuff is absolutely legal, and if you are someone who disagrees with this and prefers to pay more taxes regardless of whether or not you can reduce it legally,

then it doesn't hurt to understand the tax rules and reduce that tax bill so that you can, instead, use the money to give back to things that directly align with your values,

instead of letting someone else decide where that money should be going.

If you want me to make a video on tax, I was planning to; I already have a summary on what I want to include but I have been a bit skeptical about whether to release it.

It's a topic that can go either way, so let me know in the comments below if you want to see that.

Number eight, waiting too long to invest.

When you start having savings, you have that stockpile, that buffer that we spoke about,

then you want to start looking at investing that money so that your money starts working for you and you want to diversify those investments so you can weather different situations that come around in life.

But you want to avoid leaving that money in a bank account because inflation is a thing, and it means that you're essentially losing money every year.

So I have a mixture of safe investments, of riskier investments that I'm willing to lose as well.

Start looking at different investment strategies once you've saved up enough.

Don't leave any additional money⏤more than you need to⏤in a bank account.

I have another video on what you can be doing with your money in times like the current recession, and I'll link that here for you as well.

There's always going to be reasons why you can't invest, because you don't have time, you don't have enough money, you don't know where to start.

But the longer you put off investing, the harder you will have to work to get that same level of financial freedom as someone who starts investing earlier.

It may just be finding the right person or the right tools that help you resonate with your finances in a way that most appeals to you,

whether that's through an employee perspective, an entrepreneur perspective, someone who is a⏤less of a risk taker, someone who is more of a risk taker,

but there will be someone who kind of matches your investing style more closely.

Thank you so much for watching; if you like this video, you may also enjoy another one that I've linked here on building wealth and making money work for you.