In a recent post on the X platform, formerly known as Twitter, Ramsey wrote, “If you want to win with money, let me give you a good idea: Figure out what most people are doing and RUN in the other direction. Most people are broke. Most people look good and they’re broke.”
According to Ramsey, avoiding FOMO trends may be one way to build wealth, but there are other things you should also avoid if you want to do so.
An impulse purchase is anything you buy that you weren’t planning to, such as a candy bar in the checkout lane or even a new car at the dealership. According to a Slickdeals survey, 36% of respondents said that most of their purchases were spontaneous, and the average person spent $151 impulsively per month this year.
Ramsey Solutions indicated we impulse buy because of our emotions, past experiences, simply loving shopping or because we think it’s a good deal. To help you cut back on impulse purchases, make a budget and stick to it. Give yourself permission to spend (within reason), always shop with a plan in mind and only take the cash you’ll need.
Social Media Obsession
Due.com stated the average American spends 2 hours and 54 minutes per day scrolling through social media. This adds up to 44 days each year. Users are barraged with images and videos of people who appear to live a life of luxury, but this constant exposure to “perfection” is more harmful than helpful.
Social media can put pressure on younger people to maintain a certain image and live beyond their means. One of the best ways to avoid this? Cut back on social media. Keep the apps out of sight or limit your screen time.
New Trader U says “fake rich” people often have zero savings or investments, even if they earn a substantial amount of money. They’ll spend their money on luxury items and can even live paycheck to paycheck. The best way to build up your savings is to make a budget and put as much into your savings account as possible after paying all necessary household expenses.
Always Looking for the Approval of Others
According to New Trader U, “fake rich” people always look for the approval of others and try to impress others with their wealth and possessions. They’re typically more concerned with what others think rather than their own financial well-being. Instead of focusing on how others see you, concentrate on your own achievements.
Relying on Credit Cards
“If you use credit cards, you don’t want to be rich,” billionaire entrepreneur Mark Cuban said during an interview on “The Ramsey Show,” per CNBC Make It. Credit cards give you access to more money than you may have, but you’ll be paying much more in interest than you spent if you let your credit card debt build and only make the minimum payment.
If you do use a credit card, pay off your outstanding balance every month and stay below your credit limit.
Lack of Financial Education
Lack of financial education is a big problem in the U.S., leaving many young people unprepared to manage their finances as they enter adulthood. According to Ramsey Solutions’ “Financial Literacy Crisis in America: 2023” report, only 17% of U.S. adults said they took a personal finance class in high school.
A lack of financial education can lead to poor financial decisions, such as overspending, taking on too much debt and forgetting savings and investments, per Due.com. It’s never too late to learn, and becoming financially literate might help you better manage your money and ease your stress.
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