7 Money Habits That Keep You Poor, According to Research

7 Money Habits That Keep You Poor, According to Research

Financial literacy is crucial to achieving economic stability and breaking the cycle of poverty. However, many individuals struggle with destructive behaviors that cause poor money habits that can perpetuate financial hardship.

In this article, we’ll explore seven everyday behaviors directly linked to bad money habits that can trap you in poverty. I will provide actionable advice for overcoming these challenges.

Money Habits That Keep You Poor

Here are the seven most common money habits that keep people poor based on academic studies:

  1. Poor Sleeping Habits Cost Money
    Earning money requires proper sleep. Lack of sleep is associated with obesity and weight gain, which can lead to health issues and increased medical expenses that drain financial resources. Insufficient sleep disrupts healthy habits and decision-making abilities. It is challenging to get an education and have a successful career with perpetual sleep deprivation. [1]
  2. Unhealthy Eating Habits Are Expensive 
    Poor eating habits are expensive, such as frequently spending money on fast food, which can negatively impact health and lead to obesity-related diseases. This increases healthcare costs and reduces productivity, perpetuates the cycle of poverty. It requires healthy eating habits to maintain the energy needed to get an education, have a successful career, or build wealth. [2] 
  3. Tobacco and Substance Addiction Cost You A Lot
    Buying cigarettes or other addictive substances is an expensive money habit. Tobacco addiction, especially starting at a young age, can lead to oral cancer and other health issues that require costly treatment and reduce earning potential, keeping people trapped in poverty. Addiction is also a top cause of homelessness and poverty. [3] 
  4. A Lack of Financial Literacy is Expensive 
    It’s a bad habit not knowing how to manage your finances. Lack of knowledge about budgeting, saving, and investing can lead to poor financial decisions that keep people in poverty. Financial stability is a protective factor for families, and without financial education, individuals struggle to manage their money effectively. [4]
  5. Lack of Access to Banking Services is Costly
    Not having access to formal banking services is an expensive money habit. Banks are crucial for promoting financial inclusion and encouraging savings among low-income people. Without access to these services, individuals are less likely to save and more likely to remain in poverty. The expenses of financial services outside of traditional banking are a high percentage of lower-income paychecks. [5]
  6. Economic Dependency on Public Entitlements is a Trap
    One of the worst money habits you can have is dependency on government programs instead of seeking employment. This reliance on the government can perpetuate poverty by preventing individuals from developing skills and earning an income.
  7. Poor Health Habits are Expensive
    Poor health is an expensive money habit—good health practices like exercise, proper nutrition, and regular medical checkups are. Chronic health issues can lead to missed work, medical expenses, and a cycle of poverty. Due to the costs, poor health habits can also significantly impact an individual’s financial stability.

Let’s dive deeper into these expensive habits that will cost you money.

The Sleep-Poverty Connection: How Poor Sleep Habits Drain Your Finances

The link between sleep deprivation and financial stability is often overlooked but can significantly impact your financial well-being. Lack of sleep can lead to poor decision-making, reduced productivity, and increased healthcare costs.

When you’re sleep-deprived, you’re more likely to make impulsive purchases, struggle with managing your finances, and experience health issues that can drain your bank account. It is also impossible to have a lucrative career with terrible sleep habits.

To improve your sleep habits and boost your financial well-being, try establishing a consistent sleep schedule, creating a relaxing bedtime routine, and avoiding electronic devices before bed. By prioritizing quality sleep, you’ll be better equipped to make sound financial decisions and avoid the costly consequences of sleep deprivation.

Fast Food Fallacy: The High Cost of Unhealthy Eating Habits

While frequently consuming fast food may seem convenient and affordable, it can have a significant financial impact in the long run. Fast food is often more expensive than preparing meals at home, and it can also lead to long-term health consequences that come with hefty medical bills.

Consider adopting budget-friendly, healthy eating habits to save money and improve your health. Plan your meals, cook in bulk, and opt for whole, unprocessed foods. You can avoid the financial pitfalls of unhealthy eating habits by making intelligent choices at the grocery store and in the kitchen.

Fast food is no longer as cheap as it was four years ago, and the cost adds up over time in food expenses in your budget that could be used for saving and investing. The cost to your health can be even higher.

Smoking Away Your Savings: The Financial Toll of Tobacco Addiction

Tobacco addiction not only takes a toll on your health but also your wallet. The direct costs of purchasing cigarettes can add up quickly, and the indirect costs, such as increased healthcare expenses and reduced earning potential due to smoking-related illnesses, can be even more devastating.

If you’re struggling with tobacco addiction, know that quitting is possible and can have a profound impact on your financial health. Seek out resources such as nicotine replacement therapy, support groups, and counseling to help you kick the habit for good. Taxes make smoking a costly and destructive money habit, diverting the money that could be used for saving and investing. It can also end your working life a decade or more too early.

Financial Illiteracy: The Knowledge Gap That Keeps You Broke

A lack of financial literacy can be a significant barrier to financial stability. Without a solid understanding of budgeting, saving, and investing, it’s easy to fall into the trap of living paycheck to paycheck and accumulating debt.

To bridge the financial literacy gap, use the numerous resources available, such as budgeting apps, online courses, and financial education workshops. By improving your financial knowledge and skills, you’ll be better equipped to make informed decisions about your money and work towards a more stable economic future.

Banking Barriers: How Lack of Access to Financial Services Perpetuates Poverty

Managing finances can be a significant challenge for those without access to traditional banking services. High fees associated with alternative financial services, such as check-cashing and payday loans, can eat away at already limited incomes, making it difficult to save and get ahead.

If you’re unbanked or underbanked, explore alternative options such as credit unions, online banks, and prepaid debit cards. These services often have lower fees and more flexible requirements than traditional banks, making them more accessible to those with limited financial resources.

The Entitlement Trap: How Dependency on Government Aid Can Hinder Financial Growth

While government assistance programs can provide a crucial safety net for those in need, relying solely on these programs can hinder long-term financial growth. Developing marketable skills and seeking employment opportunities, whether part-time or entry-level, can be essential to achieving financial independence.

If you’re receiving government aid, take advantage of job training programs, educational resources, and career counseling services to help you transition into the workforce. By taking proactive steps towards self-sufficiency, you can break free from the cycle of poverty and build a more stable financial future.

The Health-Wealth Link: How Poor Health Habits Keep You in the Red

Poor health habits, such as lack of exercise, unhealthy eating, and neglect of preventive care, can significantly impact financial well-being. Chronic health issues can lead to missed work, reduced earning potential, and sky-high medical bills that can quickly drain your savings.

To improve your health and finances, prioritize self-care and adopt healthy habits. Make time for regular exercise, choose nutrient-rich foods, and schedule routine checkups with your healthcare provider. Investing in your health will make you feel better physically and better positioned to achieve your financial goals.

Key Takeaways

  • Prioritize restful sleep to enhance financial decision-making and maximize career potential.
  • Opt for cost-effective, nutritious meals over convenient but expensive fast-food options.
  • Eliminate tobacco use to improve your physical and financial well-being
  • Bridge the financial knowledge gap by utilizing budgeting tools and educational resources
  • Explore alternative banking solutions to minimize fees
  • Pursue skill development and employment opportunities to reduce reliance on government assistance
  • Adopt a proactive approach to health and self-care to prevent costly chronic conditions


Breaking free from poverty requires financial literacy, healthy habits, and access to supportive resources. By identifying and addressing the money habits that may be holding you back, you can take control of your financial future and work towards a more stable, prosperous life.

Change doesn’t happen overnight, but you can transform your financial situation by taking small, consistent steps in the right direction. Start by assessing your current money habits, setting achievable goals, and seeking the resources and support you need to succeed.

With dedication and perseverance, you can break free from the money habits that keep you poor and build a brighter financial future.