6 Money Moves You Don’t Know You’re Making That Could Push You Into Poverty

Colorful stack of credit cards and shopping gift cards.
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Watching your finances take a dip for the worse is a deeply jarring experience. One day you’re happily shopping for groceries when your card is suddenly rejected, or you discover you don’t have enough money at the end of the month to pay your utility bill.

While scary, these are eye-opening scenarios that can easily be prevented, according to experts.

“Often, the difference between financial freedom and hardship lies in the seemingly innocuous habits and choices we make without much thought,” said David Rafalovsky, CEO of Oxygen, a finance app.

Over the years, he has observed a range of common missteps that many individuals inadvertently make, which can have long-lasting implications on their financial well-being.

Below are some of the money moves you might be making right now that could push you into poverty.

Failing To Budget

One of the most significant, yet often overlooked, habits, according to Rafalovsky, is the failure to budget and track spending. 

“Many people underestimate the power of a budget in providing clarity over their finances,” he said. “Without a clear budget, it’s easy to overspend in various categories, leading to a paycheck-to-paycheck lifestyle, regardless of one’s income level.”

He said this can spiral into accumulating debt, as credit cards or loans are sought to cover gaps in finances, thereby increasing expenses through interest payments.

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Mafe Aclado, general manager at Coupon Snake, said descending lower into poverty can be very gradual for most, especially when you are unaware that you are on your way there. 

“In my experience as a finance expert,” she said, “I have learned that living without a budget is one of the fastest ways to lose track of how much expenses you incur versus how much income you bring in. And with today’s high prices, the truth is this neglect is one money move that can push you into poverty.”

Neglecting Your Emergency Fund

“Neglecting to save for emergencies is a precarious move that can swiftly push an individual towards financial distress,” Rafalovsky said. “Life is unpredictable; and, without a safety net, unexpected expenses such as medical bills, car repairs or sudden job loss can quickly deplete resources, forcing reliance on high-interest debt options.” 

He said the absence of an emergency fund exposes you to greater risk of financial instability.


“Overspending is really the top financial move I see people making that has the tendency to push them toward poverty,” said David Kemmerer, CEO of CoinLedger.

“Lots of times, people experience poverty due to job loss or other unforeseen circumstances,” he added, “but it’s also deceptively easy for overspending to result in, and keep someone in, poverty. I generally see this as someone living outside their means — paying for too big or central of a home, too expensive of a car, eating out too much, etc.”

He said these are all things that really start to add up over time and can result in you living in a worse financial state than you should or could be. 

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Overreliance on Credit Cards

Relying too much on credit cards — and not making your payments — can be detrimental to your financial health, said Jake Hill, CEO of DebtHammer.

Credit cards can be a great resource for credit score building and earning rewards,” he said, “however, when used poorly, they can really hurt you.”

He said credit cards typically have very high interest rates, so if you start to accumulate debt, that will build exponentially with interest, making it harder and harder to get out of.

Not Tracking Your Spending

If you’re not tracking your everyday spending, you could be putting yourself on a path to poverty, said Ann Martin, director of operations of CreditDonkey.

“This is especially true for those who frequently rely on credit since even small everyday purchases can add up quickly if you aren’t tracking them.” 

As interest continues to accumulate, she said, you could find yourself facing mounting debt and much higher monthly payments. “These higher payments will stretch your budget to its limit.”

Not Diversifying Your Investments

According to Rafalovsky, investing solely in high-risk ventures without diversification is another hidden pitfall. 

While the allure of high returns can be tempting, he said the volatility associated with high-risk investments can lead to significant losses, especially if your entire savings are concentrated in such assets. 

“Diversification across different types of investments can mitigate risk and provide a more stable growth path for one’s portfolio,” he said.

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To steer clear of these pitfalls, he said, it’s essential to adopt a proactive approach to managing finances. 

“Implementing a budget, saving diligently for emergencies and diversifying investments are foundational steps in building a secure financial future,” he explained. “It’s also vital to educate oneself on financial literacy, as understanding the basics of personal finance can empower individuals to make informed decisions that align with their long-term goals.”

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