imagine this scenario you're working hard in your nine to five job making decent money and aspiring to become financially independent you're taking those baby steps towards accumulating wealth but wait are you unintentionally falling into the same money traps that have Afflicted countless middle-class professionals according to the legendary Warren Buffett one of the world's wealthiest investors there are common pitfalls that the middle class often Falls prey to hindering their path to financial success in this video I'm going to share 14 things that poor people waste money on as per Buffett's wisdom one brand name Obsession many people think that buying fancy brand name products makes them look rich and successful even if they don't have a lot of money but interestingly Rich folks like Warren Buffett Mark Zuckerberg and Bill Gates see it differently they like nice stuff too but they're more into getting good value for their money they know that just because something has a famous brand name on it doesn't mean it's worth the high price instead they pick things that are worth the money or really useful rich people usually think more about saving and growing their money in the long run they might enjoy luxury once in a while but they don't spend too much on brand names as a lifestyle they'd rather put their money into things that go up in value like stocks property or businesses look for quality not just a flashy name two buying a house buying a house is different for rich and poor people the rich usually don't rush to buy a house when they start their Journey towards success instead they rent a house while they save money and build up their their wealth on the other hand many poor people make a mistake by taking on a lot of debt to buy a house and this can harm their financial situation it's risky to put all your assets savings and debt in one place plus owning a house can be expensive because you have to pay for maintenance and other costs Warren Buffett a famous investor advises against buying a house with a lot of debt because it can lead to financial trouble having a home for your family is okay but it's important to be smart about how you buy it avoiding too much debt is key to staying financially secure three unnecessary subscriptions imagine signing up for services or memberships that you rarely use like streaming apps magazines or gym memberships these sneaky subscriptions can quietly take your money and stop you from reaching your financial goals without you even realizing it a study from 2021 found that the average American spends about 348 dollars every year on subscription they rarely use that's like throwing money away gym memberships are a big culprit here on average people waste 143 toll ones every year on gym memberships they don't use so here's how to avoid these money traps first keep an eye on your bank and credit card statements regularly also watch out for those free trial offers because they can turn into paid subscriptions without your knowledge by avoiding unnecessary subscriptions you can save money and use it for things that matter more to you it's a simple and smart way to manage your finances and keep more of your hard-earned cash 4. smoking and vaping smoking and vaping are not only harmful to you but they can also cost you a lot of money people who don't have a lot of money spend more on smoking and vaping than others let me break it down for you imagine you smoke a pack of cigarettes every day that's about two hundred dollars a month in a year you'll spend two thousand four hundred dollars on cigarettes if you you keep this up for 10 years that's a whopping twenty four thousand dollars just think about all the things you could do with that money like investing in stocks real estate or even buying a new house five buying new cars buying a brand new car might seem cool but it's not a smart money move trust me nothing you do in your life will waste more money than splurging on a new car here's why as soon as you drive it off the lot that shiny car starts losing value like magic disappearing money in just one year it can lose 20 to 30 percent of its value and in five years poof it can lose at least 60 percent of what you paid for it imagine if you had a piggy bank and every time you drove some money vanished that's what happens with a new car here's the kicker many folks take out loans to buy new cars but why borrow money for something that's instantly worth less it's like borrowing cash and then throwing it out the window not smart right now here's a bright idea instead of blowing a fortune on a new car consider buying a used one but not just any used car look for those that have only been driven for two to three years like when someone leased it these cars are almost as good as new but you can snag them for a lot less about 30 percent off the brand new price it's like buying the same car but keeping more money in your wallet to help you avoid the big money blunder follow a simple rule don't spend more than 10 percent of your yearly income on a car that way you'll have a sweet ride without draining your bank account 6. credit card misuse in today's world we often use credit cards to buy things we want instantly but borrowing money with high interest rates as Warren Buffett advises against isn't smart credit cards let us buy stuff without our own money but they often lead to unnecessary purchases when we pay the small monthly amount most of it goes toward High interest fees tricking us into thinking we can afford more than we can this means less money to save and invest in our future while some credit cards offer rewards Warren Buffett's advice is to be cautious with high interest borrowing think carefully before borrowing consider if it truly benefits you long term or just adds to interest costs be smart with your money 7.
impulse buys impulse buying is when you buy things without planning driven by desire or immediate gratification if you're part of the middle class you might be surrounded by a culture that encourages buying things it happens in stores and online often encouraged by marketing tricks to avoid it wait before making non-essential purchases wealthy people focus on saving and investing for the long term rather than impulse buying they know that being careful with money is key to being financially successful some rich people also prefer to use cash or debit cards instead of credit cards because it makes them think twice before spending money eight eating out too frequently it's important to have fun and go out with friends or your partner once in a while it's nice to grab a drink with friends or watch a movie with your loved one but think about how much money you spend when you go out could that money be used for something else I'm not saying you shouldn't go out and have fun but you don't have to do it every Friday night or every time you get paid some people like to go to fancy restaurants or share pictures of their fancy meals on social media to show off going to restaurants every weekend can cost a lot of money cooking at home is not only cheaper but also a chance to become a better cook when you eat out you also spend money on things like parking transportation and alcohol these costs can add up and you might not even think about them when planning your meals at restaurants 9. constantly upgrading gadgets and devices while staying up to date with technology is important buying the latest gadgets every year can be a drain on your finances you want the newest and greatest technology because of all the features it gives you on your phone but if you think about it the improvements in each new Gadget iteration are often marginal upgrading to the latest model may not provide substantial benefits over your current device in terms of functionality or performance and the price to upgrade may not be worth it we buy gadgets more often than needed like smart water bottles cool alarm clocks fancy toothbrushes and sound systems although cool these items are truly not necessary the next time you see a gadget to lust over think twice before you buy it odds are we usually don't need it instead the money spent on frequent Gadget upgrades could be invested elsewhere to generate potential returns 10. excessive social spending and living beyond means don't feel pressured to spend too much money just to keep up with others like the Joneses it's important to focus on having Financial Security rather than trying to impress people with fancy stuff going all out with expensive parties and events might seem fun at the time but it can eat away at your savings also trying to look super successful by spending a lot can actually stress out your finances instead work on building real wealth not just putting on a show sometimes spending a lot on social stuff can make you feel good quickly but it doesn't last it's kind of like a temporary happiness high and it can become a bad habit to stay financially stable and avoid getting into debt it's better to live within your means which means spending only what you can afford this way you'll have money saved up for emergencies or cool opportunities that come your way 11.
lottery tickets and gambling many people dream of getting rich quickly by spending just a little money this dream is a natural human desire for easy wealth lotteries and gambling offer the hope of a life-changing event that can be hard to resist particularly for those facing Financial hardships or feeling stuck in their current circumstances the occasional wins even if small provide a dopamine Rush that keeps individuals coming back in the hopes of hitting a bigger jackpot unfortunately the odds of winning in most gambling activities including lotteries are overwhelmingly low making it a highly unfavorable way to invest one's money while occasional entertainment through gambling may be relatively harmless for some it's crucial to recognize the potential risks and consequences of falling into the Trap of excessive gambling including Financial ruin strained relationships and addiction 12. drinks at bars many folks spend a lot of money on going to pubs and bars each year which can add up to thousands of dollars when you go to a bar a single bottle of beer can cost you around five dollars and sometimes even closer to ten dollars however if you buy beer from a grocery store you can usually get a six pack for about ten dollars that's a lot cheaper about three times less expensive than getting it at a bar most people go to bars because it's a fun place to hang out with friends and meet new people but there are many other ways to socialize and make friends without spending so much on drinks if you want to have drinks with friends you can consider having a house party instead it's a great way to enjoy time together without breaking the bank you can buy your drinks at the store and have a fun and affordable get-together at your place it's a simple way to save money and still have a good time with friends 13. personal care products taking care of your skin is important but sometimes we get carried away with using too many different products you see the beauty and Skin Care industry keeps coming up with new stuff all the time and it's easy to want to try everything but here's the thing using lots of products together can actually make your skin worse so the best idea is to keep it simple find a routine that works for your hair face and body and stick to it you don't need to buy expensive stuff just a few affordable products that you like and when you feel tempted to add more products to your routine ask yourself if it's really necessary or if you're just changing things for the sake of change sometimes less is more when it comes to taking care of your skin 14.
