Harmful Habits You Probably Do Not Realize

Updated: Jun 27, 2021

For many, the idea of living from one paycheck to another is akin to an unpleasant dream one would want to quickly wake up from. Unfortunately, it has become a reality for many Americans. And this can be directly traced to certain financial habits that they are likely not even aware can be harmful to them and their loved ones.

A modern wealth index survey carried out in 2019 by Charles Schwab found that 59% of adults in the U.S. live paycheck to paycheck. One may think that this number comprises mainly of people in the lower class. Surprisingly, the same can be said about middle-income and even upper-income earners in the country.

What this means is that even those that make six figures are also trying to make ends meet. And the spending of people on their lifestyle matches the level of their income. A global advisory firm carried out a survey in 2020 and discovered that 18% of employees who earn an annual income of at least $100,000 still live paycheck to paycheck.

What were those financial habits quite common amongst middle-class Americans?

1. Spending a lot on depreciating assets

The majority of middle-class Americans buy cars (yes, often more than one) and spend recurring maintenance costs on them. Often, cars that are on the higher end of the price spectrum are chosen mainly in an effort to impress others. Unfortunately, the money that would have gone into savings was lavishly spent on car purchases.

2. Delaying retirement savings

Starting a retirement plan very late is a habit that is common with most middle-class Americans. The challenge to distinguish between what is truly a need versus want is quite common amongst people in the U.S. Because of the delay in commencing a retirement savings basket, they pay a high cost in terms of lost opportunity in compound growth in their savings.

3. Forgoing a cash reserve

The importance of cash reserve cannot be overemphasized. However, according to a Federal Reserve financial report, 46% of Americans find it difficult to cover an emergency expenditure of at least $400. With so many expenses, it is very likely to have little or nothing stashed away for rainy days.

4. Buying on an impulse

Buying on impulse or as a result of what is trending is another habit of the middle-class. When there is an unplanned expenditure, these leave a huge hole in wallets and even very likely make people pile on more debt. Some of these purchases may look insignificant at the time. But with time, they add up and could cause real financial damage.

What will happen if these habits go unchanged?

Leaving these habits unchecked can lead to financial insecurity. People may have to continue working full-time even after they have passed retirement age to cover their living expenses. This also means having nothing to bequeath or leave behind for the next generation.

How one can become more aware of these bad habits.

  • Invest in financial education: Knowledge is the key. Take time to get financial education either formally or informally. This can help you make better financial decisions.

  • Establish financial goals: Having clear-cut goals of the net worth you’d want to achieve at retirement and general financial expectations is very important. It will help you identify habits that work against the actualization of your set goals. Reach your financial goals in a post-pandemic world with Qinta. Sign up for early access here.


What you earn is as important as how you spend. This is true when trying to build financial independence. The habits you build today can either strengthen or weaken your financial situation in the future.

71 views1 comment

Recent Posts

See All