Sometimes, people develop bad habits without even realizing it, and financial influencer Vincent Chan said this is especially true when it comes to people’s financial habits. The truth is, no one is born knowing exactly how to save money, budget or invest. So, many people learn by trial and error.
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However, for those who want to improve their financial situations and build wealth in the future, it’s a good idea to learn about the common money mistakes below. That way, it’s easy to identify whether some of these money habits are preventing them from building the life they want.
Here are five money habits that keep people broke, which Chan recently discussed in a TikTok video on his channel.
Spending First and Saving What’s Left Over
Chan said one of the biggest mistakes people make is spending what they want first and saving whatever is left over. When people do this, it’s very easy to overspend and not have enough left over at the end of the month to save.
Chan recommends that people follow the 80/20 rule, which means saving 20% of their income right away and then spending the remaining 80%. This prioritizes saving and helps prevent wasteful spending.
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Waiting Too Long To Invest
Chan explains that 99% of Warren Buffett’s wealth happened after Buffett turned 50. A CNBC article reports that Buffett’s wealth especially soared after the age of 65. The lesson, Chan said, is that the earlier you invest, the more you can benefit from compound interest. Chan explains that one mistake people make is waiting too long to invest.
Using Credit Cards If They Can’t Afford Something
Chan said that if you can’t afford something in cash, don’t use your credit card for it. The average credit card interest rate is 21%, per the Federal Reserve, so using credit cards and not paying off the balance can create a debt cycle that is difficult to escape.
According to the financial influencer, the exceptions to his paying cash rule include healthcare, homeownership and educational costs. In such instances, many people are unable to pay in cash, but the investment may be worthwhile in the long run.
Not Keeping Track of Income and Expenses
Chan emphasizes that people must keep track of their income and expenses to grow their wealth. Keeping a detailed budget, where you monitor the amount of money coming in and the amount of money going out, can help people carefully assess their cash flow.
Once people have a grasp on their cash flow, they can start to identify patterns of high spending in areas that can be cut back on and reallocated to investing.
Not Saving Enough
According to the Bureau of Economic Analysis of the U.S. Department of Commerce, the average personal savings rate in the United States as of June 2025 is 4.5%. Chan said this isn’t nearly enough.
When people have an emergency fund and save a large portion of their income, it can help them avoid high-interest debt. If people can increase their savings rate and invest what they save, they can reach their financial goals much faster.
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This article originally appeared on GOBankingRates.com: 5 Terrible Money Habits That Keep People Broke, According to Vincent Chan
