5 Money Habits I Learned That Will Never Make Me Rich

Here's an insightful post from Allan from The Philippines. He shares with us his story about growing up poor and working his way up. Hope you enjoy his 5 money habits he learned that will never make you rich.

They say we are creatures of habit. This is especially true when it comes to money. When the going gets tough, it is easier to resort to what’s comfortable. When that happens, your own money habits take over. The only question is – will your money habits get you through and make you rich?

Bad Practice #1 Playing with money

Learning my money habits started when I was still a young kid playing outside the house on a sunny afternoon. The first money habit I learned was playing with money. Yes, literally. But not with actual money.

My friends and I would play games betting on carefully folded cigarette packs looking like play money. A red Marlboro is worth PhP 50 (US 1$). A green local brand “Champion” cigarette is PhP 5 (10 cents). A Philip Morris cigarette pack is worth PhP 100 (US $2).

It was all play money then. And it was easy to get. I only need to wait for my father to finish his cigarette pack and I’d be on my way to earning my (play) money for the day. Sometimes, we even played with coins, taking turns and rolling them on the floor like a dice. Playing with money was fun!

Somewhere between playing with other kids and being conscious on what’s cool, I learned that money can buy me things. But since we were poor, I had to make do with my worn out clothes. After some time I’ve already outgrown it so much, I already looked like Winnie the Pooh.

It’s not so much about other kids having better clothes. It was more because I was not able to play outside as much as the other kids. My mother would always remind me to do my house chores. Wanting to go out and play instead, I would reason out “how come the other kids are not doing any chores?” To which my mom lovingly responded,

“Because we are not like them. They can do whatever they want because they are rich. We are poor. ”

That was the first time I realized we were different from other people. We were poor. I began to notice how worn out my clothes and shoes are. I remember even going to school with no shoes on.

That’s one lesson I took to heart. If you don’t have money, you are poor. If you are poor, you need to work to have some money. This is one of the best money habits to have: grit!

# 2 – Working for money

Growing up with a family of farmers, I knew how hard my parents worked just to put food on the table. My mom would sometimes ask me to help out in harvesting tobacco leaves at a nearby town. She’d motivate me by paying for every tobacco leaf I was able to harvest. With promise of a paycheck, I willingly agreed to go.

The next day, I woke up early in the morning, went with her to the farm, and started plucking tobacco leaves left and right. After hours of standing under the grueling heat of the sun, I managed to harvest loads of tobacco leaves. That day, I went home enduring an aching back and torn muscles. But I was happy. I was able to help out my mom and it also made me PhP 100 (2 US $) richer. That’s actual money, not a Philip Morris cigarette pack. :)

It was hard work. I was so tired I thought I was going to get sick the next day. Good thing I was able to watch my favorite TV show that night – a Japanese game show called ‘Takeshi’s Castle’. I was able to laugh it off and sleep soundly that night.

One thing was clear from then on. I must first have to work before I can expect to earn money and get paid. If I don’t get paid, I don’t have any money to spend.

Related: Dear Doctors, Techies, and Lawyers: It's Hard Getting Rich Working For Someone Else

# 3 – Spending money

Spending too much money is one of the worst money habits. Always spend within your moneys.

After graduating from College, I was fortunate enough to get hired by a multinational IT company as a Mainframe Programmer for a monthly salary of PhP16,000 (about US $320). It was big money for me then, coming out straight from College without any working experience.

When I got my first paycheck, I was so thrilled. I thought it was the best time of my life. Why shouldn’t it be? I had money to buy what I could not afford before. Even if it’s just a new pair of shoes. Even if it’s just occasional dinner out with friends. Even if it’s just a nice shirt or two. After all, the money I earned was finally my “own”. It was liberating.

But not for long. The more I consumed, the more I realized I wanted more. I wanted more money to buy that new mobile phone. So off I went and tried the only way I knew how to make more money then – work hard on my job. As a result, I got promoted almost every year and my paycheck steadily increased. Sooner than later, I realized that even with the higher pay, it seemed like it was still not enough. I was still always short of cash.

That’s when I realized, there’s actually another way to get more money – borrow.

# 4 – Borrowing money

Borrowing too much money can be one of the worst money habits. Once I started earning quite a bit, I got comfortable spending for stuffs. It got to a point where I bought something even though I didn’t have the money to pay for it. I only had to use my new credit card.

In one day, I bought a new washing machine, a refrigerator, a gas stove and a new pair of shoes all at the same time. Worse, all the balance had to be paid off at the end of the month.

I didn’t know there’s a thing called “monthly installments” then so I never bothered to ask. All I cared was showing off, pretending to have a lots of money using my new credit card. Looking back, it was one of the most stupid thing I’ve ever done in my life.

Even if I wanted to, I couldn’t pay ALL of the balance after a month. In the first place, the reason I used the card is because I didn’t have the cash. I tried to pay as much as I can but after months of painfully paying a little bit above the minimum I was getting nowhere near paying the balance off.

To make matters even worse, I got myself in deeper trouble by doing cash advance on my credit card just to have the cash to pay for my rent. I paid the hefty cash advance fee with a sinking feeling in my stomach.

I had no choice. I could get thrown out of the apartment if I didn’t pay up. It was a humiliating and painful experience for me. From then on, I bowed not to allow myself to experience the same thing again.

Related: Never Borrow Money From Friends And Family

# 5 – Saving Money

The next day, I went straight to our company’s cashier and signed-up for an automatic savings program. The program automatically deducts a percentage of my paycheck and transfers it into my savings account.

I started with only 2% of my paycheck enrolled into the savings plan. After 3 months, I increased it to 5%. Another 3 months and I increased it again to 10%. After a year I felt comfortable enough to increase it further to 20%. In my mind, if the money does not reach my hands, I won’t be able to touch it. I won’t be able to spend it.

I was still paying off my debt at this point but the automatic savings plan was a big help on my confidence. It was liberating to know that I had some money saved somewhere, even if I don’t see it.

After years of saving, I was finally able to pay up my credit card debt. I was so scared of debt, I immediately had my credit card cut off the day I paid the whole balance. I felt finally free after a really long long time!

Months of saving through the automatic savings plan was a big help in building my emergency fund for around 6 months worth of expenses.

This proved to be a great thing since a few months after, my sister slipped while walking through our staircase and sustained a head injury. I was shocked. With adrenaline rush kicking in, I managed to bring her up to the hospital.

To this day, I still thank God that this happened when I already had a bit of money saved up. I was able to buy the necessary medicine. I was able to pay for the hospital bill. I was able to pay for the operation. More importantly, my sister got well without any complication. I can’t imagine how it would have turned out had this happened while I was still heavily in debt.

Out of all the money habits, saving and investing money is the best. I recommend investing in growth stocks over dividend stocks.

Why these 5 money habits will never make me rich

Establishing strong money habits is important. Looking back, I certainly have come a long way as a young kid playing with cigarette packs pretending they're money to now a debt-free IT professional with an emergency fund able to help out his sister in an actual emergency.

In all honesty, I really think these 5 habits alone will never make me rich. I’m still a long long way to go from financial freedom. Saving money is good, but making it grow is another thing. 

At least it's a good starting point.  I'm eager to learn the money habits of investing and starting on my journey to becoming truly rich.  When that happens, I’ll have another 5 money habits to share to you.

Related: Start Your Own Website And Get Rich 

Also check out Untemplater for some great money habits tips.

About Allan: Even with the insider knowledge of working as a mainframe programmer for a credit card company over the past 7 years, he still got burned with credit card debt. As a personal finance blogger, he is trying to learn better money habits and sharing them through his blog.

28 thoughts on “5 Money Habits I Learned That Will Never Make Me Rich”

  1. Dr. Artfredo C. Abella-Philippines/U.S.A

    The best way to treat money and turn them into a habit is to recognize that money is just a servant and never your master. You develop the habit of making it a servant when you let money work for you rather you working for money. You develop the habit of making it your master when you borrow money. Money now becomes your master because you have to pay your debt plus interest charges. The best money habit that I learned is the habit of saving money. Once you can save money it will afford you a venue for investment which will lead to greater wealth.

  2. Gail Cavanaugh

    Watch the overdraft fees on checking accounts. The banks can now withdraw money form your savings account if you don’t pay them right away.

  3. Allan @ Rich Money Habits

    @Flexo, I totally agree that saving is a key component for wealth creation. And I’d even say it’s one of the most important money habit I’ve learned in my financial journey so far. But again, saving money “alone” is just a starting point. In my mind, unless I learn to grow the money I saved, it will be an uphill battle in the journey to financial freedom.
    .-= Allan @ Rich Money Habits´s last blog ..How to Invest in the Philippine Stock Market the Super EIP Way =-.

  4. Interesting article, Allan, thanks for sharing! It’s interesting that you include “saving money” as a habit that will never get you rich. Perhaps not alone, but saving money is a key component of improving your financial condition from point A to point A-plus-$1.
    .-= Flexo´s last blog ..GM Used Bailout Funds to Repay Loan: Mostly Irrelevant =-.

    1. Flexo, I was actually wondering the same thing and found it interesting “saving money” was included. Saving money is definitely a foundation for more wealth creation.

      I’d love to hear Allan’s thoughts more on this subject as well.
      .-= admin´s last blog ..Searching For Love And A Little More Money =-.

  5. Allan @ Rich Money Habits

    @Minority Fortune, thanks for the encouragement.

    @Nunzio Bruno, I’m glad you liked it. Thank you for the kind words.
    .-= Allan @ Rich Money Habits´s last blog ..How to Invest in the Philippine Stock Market the Super EIP Way =-.

  6. Nunzio Bruno

    Great post! I was leaving a comment on the Wealth Pilgrim when I came across one of yours. I really am glad I did!! I love your style and the fact that we are trying to share similar messages is awesome too!! I can’t wait to fish around in your site some more and hopefully make contact with you soon.
    .-= Nunzio Bruno´s last blog ..Coaching at the Bar =-.

  7. Minority Fortune

    Great post! Congrats, Allen, on your journey. You’ve taken steps that many individuals have yet to take. Pretty sure you’ll unlock the key to wealth with your eager thirst for knowledge. Best of luck.

  8. Allan @ Rich Money Habits

    @Guy, I totally agree. Being able to share ideas and learn from passionate bloggers is in itself a big blessing and a wonderful opportunity.

    @Forest, I’m glad you liked it. I was fortunate to get into our premiere state university in the Philippines where some of the cost is subsidized by the government. In addition, I was also blessed to be granted a scholarship which took care of the rest of the tuition fees and also provided a little bit of stipend every month. The biggest blessing I had was having very supportive parents. Even though it was very hard to earn money from a far away province, they still managed to send me money to pay for my dorm rent and food. I was very lucky.

    @Roshawn, you’re welcome. It took me around 3 years from getting my first job (and credit card) to the time I decided to start saving. From that moment on, I stopped using my credit card and tried to pay off a little bit over the minimum for more than a year. It was very slow since most of the money I paid was actually just paying off the interest. Luckily, that same year, I got assigned to a 6-month stint in the US by my employer. I saved quite a bit there that when I came back to the Philippines I was able to pay off the rest of my debts.
    .-= Allan @ Rich Money Habits´s last blog ..How to Invest in the Philippine Stock Market the Super EIP Way =-.

  9. Allan @ Rich Money Habits

    @Guy, I totally agree. Being able to share ideas and learn from passionate bloggers is in itself a big blessing and a wonderful opportunity.

    @Forest, I’m glad you liked it. I was fortunate to get into our premiere state university in the Philippines where some of the cost is subsidized by the government. In addition, I was also blessed to be granted a scholarship which took care of the rest of the tuition fees and also provided a little bit of stipend every month. The biggest blessing I had was having very supportive parents. Even though it was very hard to earn money from a far away province, they still managed to send me money to pay for my dorm rent and food.

    @Roshawn, you’re welcome. It took me around 3 years from getting my first job (and credit card) to the time I decided to start saving. From that moment on, I stopped using my credit card and tried to pay off a little bit over the minimum for more than a year. It was very slow since most of the money I paid was actually just paying off the interest. Luckily, that same year, I got assigned to a 6-month stint in the US by my employer. I saved quite a bit there that when I came back to the Philippines I was able to pay off the rest of my debts.
    .-= Allan @ Rich Money Habits´s last blog ..How to Invest in the Philippine Stock Market the Super EIP Way =-.

  10. Social comments and analytics for this post…

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  11. Roshawn @ Watson Inc

    Thanks so much for sharing your story. It’s amazing how easy it is to get into the rat race/debt trap. I am so glad that you are at the point where you are able to focus on retirement and building wealth. How long did the process take you to move from spending to saving? Also, how long did it take you to become debt-free?
    .-= Roshawn @ Watson Inc´s last blog ..Through the Looking Glass =-.

  12. Hey,
    Those are definitely true, and I think that the most true is working for money. Most people do this and that’s why most people aren’t wealthy. I believe that when you work for a greater purpose in mind than money, opportunities open up to you. For instance, you and I, in our blogs have set out to bring a much needed service of financial education to the masses. This starts out as a passion to help others and I can see, in your case, that it continues to be a passion by the humor and effort you put in your posts. Think of all the opportunities you’ve had in the past couple years to meet other great bloggers as well as some very loyal readers.
    Keep up the good work,
    Guy

  13. Allan @ Rich Money Habits

    @Alex, go for it! Cheers! :)

    @alice, I learned a lot from rich dad poor dad book too! Good luck on your financial journey!

    @Charlie, you’re welcome.

    @Sam, thanks again for the opportunity to share my story with your wonderful readers. I think the cheerfulness and happy disposition comes from our culture of being very social and family oriented.

    @Suzan, thank you for the encouragement. Yes, we definitely love to sing and dance, even if some of us are not really good at it! :) Thanks again and more power!
    .-= Allan @ Rich Money Habits´s last blog ..How to Invest in the Philippine Stock Market the Super EIP Way =-.

  14. Allan, I know you are going to do well! You put your money to best use when your family needed it. You have a goal. You seem eager to learn. And I know you will be careful w/ your hard earned money in the future.

    BTW, I always think Filipinos are the most talented people in the world when it comes to singing and dancing. This is the impression I have in addition to the happy disposition that Sam mentioned.

    Good luck!

  15. Hi Allan,

    I really enjoyed reading your story. This is what blogging is all about, sharing with others your own personal experiences and revealing what you’ve learned from them.

    Why do you think Filipinos have such a happy disposition most of the time? Is it just a part of your culture? I went on a cruise ship once, and the happiest staff were those from The Philippines by far. It was amazing how much energy your folks have.

    I would take investing slow and don’t get too into it. People have made and lost a lot of money, and at the end of the day, a lot of it is a wash. Worth learning about the markets and various investment vehicles for sure though.

    Best,

    Sam
    .-= admin´s last blog ..Why Isn’t President Obama Considered White to The World? =-.

  16. thanks for the post. we are actually on the same boat in fact erwin & I are reading rich dad poor dad and how to become a millionaire. very good books. it really stops me fr using my credit card.

  17. Congrats on the Wise Bread inclusion! Maybe Yakezei got their attention?
    .-= Eric´s last blog ..A Look Back at Personal Financial Statements =-.

  18. Allan @ Rich Money Habits

    @Powell, I’m glad you enjoyed it.

    The political situation in the Philippines is relatively peaceful, considering that we’ll be having our first-ever automated elections in about 2 weeks. The thing I love about us Filipinos is that we are always hopeful and cheerful, even in the midst of the devastating typhoons like “Ondoy”. I’m sure the distractions during the elections will be nothing compared to what we experienced from the recent natural disasters. I’d like to believe that the Philippines will come out stronger in the coming years.

    At the moment, I’m still enjoying my full-time job as a mainframe IT consultant for a credit card company. On the side, I’m also starting to learn how to invest and grow the money I get from my job by immersing myself to the great ideas of other inspiring personal finance bloggers like Sam @ FS. There’s a lot to learn and I’m taking it one day at a time.

    The Philippines is one of the best places to visit with its 7,1017 islands, white-sand beaches, underground rivers and caves, and very rich flora and fauna. If you find the time, I definitely recommend going to Boracay or Palawan island.

    I haven’t tried calculating the exact figure, but I am guessing $600 – $900 a month of expenses can give you a relatively comfortable lifestyle here in the Philippines. Of course, what’s comfortable for some people may not be for others, so you can actually go cheaper or more expensive than that.
    .-= Allan @ Rich Money Habits´s last blog ..How to Invest in the Philippine Stock Market the Super EIP Way =-.

  19. Allan, I truly enjoyed reading your story. It is wonderful to read about your journey and know that you have come a long way.

    How is the political situation in the Philippines nowadays? Are the people hopfeul ? What are your plans workwise for the future may I ask?

    I hear The Philippines is a great place to vacation, visit, or retire. How much do you think one needs a month for all expenses to be totally comfortable?

    Thnx!

  20. Thanks for sharing! I’m sure 2 and 4 will help make you rich once you add 6, a method to make the money grow :)

  21. Thanks for sharing your story. Experience is an amazing teacher. I have confidence that you will be sharing your 5 money habits to financial freedom in the future. I agree with you that your last step you shared about saving money is also the first step to financial security.

  22. Brandon Schmid

    I think working for money is one of the most misunderstood concepts in the modern world today.

    It is almost impossable to get ahead while exchanging time for money. There is no chance for freedom and as a result I have no interest in it lol

    Cheers!

    Brandon
    .-= Brandon Schmid´s last blog ..Tips on Budgeting– A dollar saved is 2 dollars earned =-.

  23. Allan @ Rich Money Habits

    @Norman, you’re welcome! Experience is an amazing teacher indeed!

    @Geek, glad you liked it. Money Habit #6 – grow your money! That’s definitely one of the next money habits I’d really love to learn!
    .-= Allan @ Rich Money Habits´s last blog ..How to Invest in the Philippine Stock Market the Super EIP Way =-.

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