Unless you’ve been living under a rock, you’re aware that many Americans in today’s society struggle with financial insecurity and mental stress. Every country deal with these stressors but this seems to have 10x since Covid, which was over 5 years ago at this point. Crazy to think, I know. Now, often, these challenges stem from certain behavioral patterns that, if left unchecked, can perpetuate a cycle of poverty and dissatisfaction. The good news is that awareness of these behaviors is the first step toward making positive changes. In this blog, we will explore five behavioral signs that can keep people mentally and financially broke throughout life, along with actionable steps to fix them.

1.) Living Beyond Their Means

Behavioral Signs: A significant number of Americans fall into the trap of living beyond their means, often influenced by societal pressures and the allude of material possessions. This behavior can lead to excessive debt and financial instability.

How to Fix It:

Create a Budget: Start by tracking your incoming and expenses. Establish a budget that prioritizes essential needs, savings, and debt repayment. Use apps or spreadsheets to simplify this process.

Practice Mindful Spending: Before making a purchase, ask yourself if it aligns with your financial goals. Delaying gratification can help you avoid impulsive buying.

2.) Lack of Financial Literacy

Behavioral Sign: Many individuals lack the knowledge and skills necessary for effective money management, leading to poor financial decisions and missed opportunities for wealth building.

How to Fix It:

Educate Yourself: Invest time in learning about personal finance through books, online courses, or financial workshops. Resources like Khan Academy and Coursera offer free or low-cost course on financial literacy.

Seek Professional Guidance: Consider consulting with a financial advisor who can provide personalized advice and help you create a solid financial plan.

3.) Avoiding Savings and Investments

Behavioral Sign: A common behavior among those who struggle financially is the tendency to avoid savings or investing money. This can stem from a lack of understanding of importance of compound interest and long-term financial growth.

How to Fix It:

Start Small: Begin by setting aside a small percentage of your income into a savings account. Automate your savings to ensure consistency, even if it’s just a few dollars each paycheck.

Explore Investment Options: Research different investment options such as stocks, bonds, or mutual funds. Consider using robo-advisors or investment apps to make investing accessible. Consider reading some of the most popular financial literacy books like “Rich Dad, Poor Dad,” “Learn to Earn,” or “A Walk Down Wall-Street,” all these books my parents gave to me in my teenage years to read that proved to be invaluable in my financial literacy journey.

4.) Fear of Change and Risk

Behavioral Sign: Fear of change and taking risk can prevent individuals from pursuing better job opportunities or starting their own business. This mindset can lead to stagnation and missed financial growth.

How to Fix It:

Embrace a Growth Mindset: Understand that change is a natural part of life. View challenges as opportunities for growth. Engage in activities that push you out of your comfort zone, whether it’s taking a new course or networking with professionals in your field.

Set Incremental Goals: Break larger aspirations into smaller, achievable goals. Celebrate your progress, which can stack confidence and reduce fear over time.

5.) Neglecting Mental Health

Behavioral Sign: Mental health issues such as anxiety and depression can significantly impact financial stability. Stress can lead to poor decision-making, decrease productivity, and even job loss.

How to Fix It:

Prioritize Self-Care: Make time for activities that promote mental well-being, such as exercise, meditation, or hobbies. Create a routine that balances work and relaxation.

Seek Support: Don’t hesitate to reach out for help. Whether it’s talking to friends, family, or mental health professional, addressing mental health concerns can lead to improved focus and better financial decisions.

To summarize, recognizing these behavioral signs is the first step toward breaking the cycle of financial and mental stagnation. By making conscious efforts to change these habits – living within your means, improving your financial literacy, prioritizing savings, embracing change, and taking care of your mental health – you can pave the way for a more stable and fulfilling life. Remember, small changes can lead to significant transformations over time. Start today and take control of your financial and mental well-being for a brighter future.