You’d be surprised how many of us slip into small financial habits that seem harmless at the moment but end up sabotaging our long-term wealth.
Worse still, these habits often fly under the radar — until you check your accounts and wonder where all the money went.
Self-made millionaires (people who started with little and built their fortunes over time) tend to spot and avoid these traps fast.
Luckily, they also share what they’ve learned so we can break free from the patterns that keep us broke.
Below are 8 habits that might be messing with your finances, along with insights from entrepreneurs who know how to turn small daily choices into big results.
1. Using credit cards as an extension of your income
When you treat a credit card like a magical pot of unlimited cash, it’s only a matter of time before you dig yourself into a hole.
Self-made millionaires often talk about how critical it is to see credit as a tool, not a fallback.
They watch their balances closely and pay off the card on time, every time. The moment you start carrying a balance, you’re effectively giving away money through interest.
Mark Cuban has been vocal about how dangerous credit card debt can be. He once said, “If you use a credit card, you don’t want to be rich.”
While that might sound like an overstatement, his point is clear: if you’re funding your life with high-interest debt, you’re constantly moving backward financially.
I remember my early 20s, swiping away without a second thought — concert tickets, dinners, random online purchases. It felt like free money until the bills showed up.
Watching the interest pile up was a wake-up call. It’s not that wealthy people avoid credit cards altogether — they just leverage them smartly.
Using a card for rewards or convenient transactions is fine, but if you can’t pay it off each month, you’re giving away a portion of your future earnings to the bank.
2. Living paycheck to paycheck with no safety net
One of the biggest regrets I hear from aspiring entrepreneurs is not building an emergency fund before taking big risks.
If you’re always on the edge, one unexpected expense—like a medical bill or a car repair—can push you right into debt.
Self-made millionaires rarely let themselves hit that danger zone. They might have started there, sure, but building a safety net is one of the first items on their to-do list as soon as money starts coming in.
Take Sara Blakely, founder of Spanx. She bootstrapped her company from a small sum ($5,000, if you can believe it) but made sure to manage her personal finances carefully, so she wasn’t solely reliant on every single paycheck.
By keeping her lifestyle somewhat modest at first, she had the breathing room to navigate product launches and rejections without sinking into a crisis.
A little cushion in the bank gives you options — like the flexibility to invest in a great idea or survive a downturn without hitting the panic button.
Even if it’s just saving up $1,000 to start, that buffer can keep you from expensive, short-term debt.
The idea is to keep building, eventually aiming for three to six months’ worth of expenses. It’s not glamorous, but it’s the secret sauce behind so many success stories.
3. Making only minimum payments on loans
If you’re only paying the bare minimum on student loans, car loans, or any other borrowed money, you could be stuck for years (or decades) longer than necessary.
The interest can balloon, leaving you with an eye-popping total amount paid by the end of the loan term.
Self-made millionaires tend to slash debt aggressively, knowing that every extra dollar put toward the principal saves them from giving more away in interest.
Warren Buffett famously avoids unnecessary debt like the plague, but for the money he does borrow, he’s strategic.
His focus is on interest rates, ensuring any leverage he uses is either very low in cost or poised to generate a higher return.
Most of us don’t have Buffett’s investment portfolio, but the concept still applies:
Paying off debt faster is effectively a guaranteed return on your money.
When you knock out a loan with a 10% interest rate, it’s like scoring a 10% risk-free return.
4. Consistently buying on impulse
We all have those moments of “I deserve this,” especially after a bad day or a minor win. But self-made millionaires are deliberate about spending.
They don’t randomly toss items into their cart without a plan. Instead, they use a shopping list or a cooling-off period (like waiting 24 hours) to see if they still want the item.
I once fell victim to impulse buys more often than I’d like to admit—midnight online shopping sprees, unplanned “treats” that added up.
I justified each purchase at the moment, but when the credit card statement arrived, I felt that dreaded knot in my stomach.
People like Oprah Winfrey, who knows what it’s like to grow up with very little, emphasize that money is a form of power — but only if you control it, not the other way around.
Having a plan—like budgeting a specific “fun spending” amount each month—stops impulsive splurges from ruining your finances.
You don’t have to kill spontaneity altogether, but boundaries keep those flash desires from turning into big regrets.
5. Ignoring your credit score and history
Your credit score isn’t just a number — it’s a gateway to better loan rates, easier apartment rentals, and even job opportunities in some industries.
If you neglect your credit report, you might miss errors that drag down your score. Or you might fail to see how close you are to hitting a dangerously high credit utilization ratio.
Millionaire entrepreneurs often talk about leveraging credit in a positive way. For instance, they might open certain accounts to boost their business operations or snag better insurance premiums.
They’re careful with payments, too, making sure everything is on time, often automated, so they don’t risk late fees or dings on their credit.
I’ve known a few folks who didn’t check their credit report for years, only to discover mistakes and identity theft issues that would have been simple to fix if caught early.
The takeaway?
A good credit history can save you thousands or more by granting you access to lower rates on car loans, mortgages, or lines of credit for a future business venture. It’s too important to neglect.
6. Not tracking where your money goes
If you never stop to check where your money is actually going, you can easily overspend on everything from streaming services to daily coffees.
Self-made millionaires, especially those who started from scratch, often get rich by paying attention to the details. They don’t just see a big paycheck and assume it’s fine to ignore the outflow.
David Bach, author of The Automatic Millionaire, coined the term “Latte Factor,” referring to the small purchases that quietly drain your wallet — like that daily latte habit.
Over time, it compounds into a significant chunk of change that could have gone toward investing or saving. Once you start tracking your transactions, you’ll see patterns that might shock you.
I used to assume I “sort of” knew where my money went.
Then I did a detailed, two-month breakdown — every coffee, snack, subscription, or random Amazon purchase.
The result was eye-opening.
Just seeing those totals in black and white prompted me to cut back on the stuff that didn’t serve me. Wealthy folks do this at scale, ensuring every dollar has a purpose, whether it’s for bills, fun, or future investments.
7. Overinvesting in depreciating assets
Cars are the classic example.
You roll a new car off the lot, and it loses a big chunk of its value immediately.
Well, self-made millionaires might enjoy nice rides when they can truly afford them, but guess what?
They don’t sink a huge portion of their net worth into vehicles that plummet in value over time.
The same principle applies to other status items that don’t hold or grow in value.
Grant Cardone, a well-known real estate investor and author, calls out buying cars with massive monthly payments as a key mistake.
He suggests that if you’re paying a thousand dollars or more per month on a car loan, you might be better off channeling that money into an income-generating asset.
For the wealthy, it’s about ROI (return on investment). If something will only lose value, they see it more as an expense than an investment.
8. Relying on a single source of income
Having one paycheck (usually from a 9-to-5) can feel safe, but it’s actually riskier than diversifying your income streams.
If that job disappears, you’re left scrambling.
Millionaires often develop multiple streams of income early in their journey, whether it’s investing in real estate, launching a side hustle, or pouring money into dividend-producing stocks.
In my own circle, I’ve seen folks who freelance on the side or build e-commerce stores that supplement their main income.
Even if those side projects only generate a few hundred dollars a month, it’s a valuable safety net.
Over time, some side hustles grow into primary moneymakers, allowing people to leave their regular jobs on their own terms. It’s about giving yourself more than one path to financial security.
Wrapping up
Closing it out, but not to be overlooked — these 8 habits can act like financial quicksand, draining your resources before you even realize what’s happening.
The good news is you can fix them.
Self-made millionaires didn’t start off with everything figured out; they recognized these pitfalls and made a conscious decision to change course.
It all begins with awareness.
- Check your credit card usage.
- Track your spending.
- Review your loans.
- Stop measuring your life against someone else’s Instagram feed.
- Shift your mindset, even if it’s just one habit at a time.
Before you know it, you’ll be channeling your money into things that genuinely build wealth — like investments, multiple income streams, and a safety net for inevitable curveballs.
Until next time, friends
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