I’ve often wondered why some of us never seem satisfied with our financial situation.
Even when I experienced significant growth in my business income, I occasionally caught myself thinking, “How come I still feel financially stuck?” It didn’t matter if I hit a new revenue milestone—there were moments when my mindset felt as though I was back at square one.
Over the years, I’ve come to realize that feeling perpetually broke isn’t always about how many dollars are sitting in our bank accounts. It’s often about longstanding habits and thought patterns that trap us in a cycle of worry and self-doubt.
I’ve spoken to friends who are in very different income brackets—from those living paycheck to paycheck to those running profitable businesses—and surprisingly, many shared the same complaint: “I don’t feel financially secure.”
I started researching the psychology behind this phenomenon and found eight common mistakes that frequently lead to these persistent feelings of lack. Let’s explore them one by one.
1. The scarcity mindset
A scarcity mindset is the belief that there will never be enough—enough money, time, or resources.
I used to think this way myself, especially in the early days of running a small digital consulting agency. Even after I landed a few lucrative contracts, I was constantly paranoid that my next project would fall through.
According to an article I read on Psychology Today, the scarcity mindset can warp our decision-making by placing too much focus on immediate shortfalls and anxieties rather than long-term financial well-being.
When we operate from scarcity, we tend to hold onto money too tightly or spend compulsively in moments of stress. Neither approach is healthy because both are driven by fear rather than deliberate choice.
The first step to overcoming this is recognizing your internal scripts: if you’re always telling yourself, “I’ll never have enough,” try replacing that belief with something more balanced, such as “I am capable of earning and managing money responsibly.” Over time, this shift helps break the cycle of unnecessary worry.
2. Not tracking expenses
For the longest time, I was one of those people who tried to keep a mental tally of my spending. Spoiler alert: that’s a terrible way to handle finances.
If you don’t have a system—whether it’s an app or a simple spreadsheet—you’re going to miss the hidden costs eating away at your budget. Many of us feel financially insecure simply because we have no clear overview of where our money goes.
By allocating a few minutes each day or week to track expenses, you’ll likely uncover patterns that surprise you. Maybe you have a daily habit of picking up fancy coffees or snagging online deals you don’t really need.
That $6 latte or that “sale” item might feel harmless, but these small costs add up and can leave you wondering why you’re perpetually short on cash. Gaining clarity on your spending is one of the simplest ways to build confidence, because your finances are suddenly no longer a mystery.
3. Treating money as a taboo subject
I grew up in a family that didn’t openly discuss money, which is quite common. So, by the time I started earning and managing my own finances, I found it uncomfortable to talk about income, investments, or budgeting—even with close friends.
This tendency to treat money as a taboo subject can make us feel disconnected from our financial reality, and it also prevents us from seeking much-needed advice.
According to a piece I read on Verywell Mind, open conversations about finances can reduce anxiety because they normalize the topic. When we avoid discussing money, we miss out on potential insights from others who may have navigated similar challenges.
Finding a trusted confidant, mentor, or financial advisor to talk to about money can make a huge difference in how secure we feel. Even if the discussions are initially uncomfortable, they often yield tangible strategies for more effective money management.
4. Lifestyle inflation without planning
Have you ever had a pay raise or a new business contract that made you think, “Finally! Now I can relax and maybe splurge a bit?” I’m definitely guilty of that.
In my early thirties, when my consulting agency finally hit a consistent high revenue, I upgraded my lifestyle overnight—bigger apartment, fancier car, more dining out. What I didn’t account for was the sudden increase in recurring expenses.
This phenomenon is often called “lifestyle creep” or “lifestyle inflation,” and it’s one of the biggest culprits behind feeling broke. The more you earn, the more you spend—yet the leftover amount you set aside for savings or investments remains almost the same, or sometimes even less.
The solution? Keep incremental increases moderate and always plan. If you want a bigger place or a better car, fine—but create a plan that allows your savings and investments to grow proportionally. That way, you’re not living large in the moment only to stress over finances later.
5. Relying on external validation
It’s easy to get caught up in what others think of your financial success. Maybe you’re the one always picking up the tab for friends or you’re chasing after the latest designer brand to prove that you’re doing well.
Back when I was launching my e-commerce store, I felt this odd pressure to look successful. I’d buy expensive accessories or tech gadgets, telling myself it was important for my “brand image.” But the truth is, these purchases were often motivated by a need for external validation, and they left me financially stretched.
When your sense of self-worth is tied to other people’s perceptions, you’re giving them too much power over your financial decisions.
If you notice yourself reaching for that fancy bag or booking a high-end vacation just to impress someone, pause and ask, “Am I doing this for me, or am I trying to prove something?” If it’s the latter, consider whether it’s truly worth the financial stress.
6. Clinging to negative self-talk
I used to have an internal monologue that sounded like, “I’m terrible with money,” or “I’ll never learn to invest properly.”
Negative self-talk can become a self-fulfilling prophecy because it discourages us from seeking solutions. If you genuinely believe you’re bad with money, you might avoid opening bills or leave that stack of financial statements unopened on your desk for weeks on end.
Switching your self-talk from defeatist to constructive makes a big difference. If you find yourself falling into patterns of “I can’t do this,” try adding a small yet powerful word like “yet” at the end: “I’m not good at investing yet.”
That shift in language, as simple as it sounds, acknowledges that competence is a process. By allowing yourself room to learn and grow, you reduce the shame and anxiety surrounding financial decisions.
7. Failing to set financial boundaries with loved ones
This one can be tricky because we all want to support the people we care about. I remember when a close relative needed help paying off some medical bills.
I immediately wrote a check without thinking through the long-term implications for my own budget. While helping loved ones is commendable, failing to set boundaries can lead to resentment or ongoing financial stress.
Experts on Psych Central suggest that establishing clear communication about money boundaries is crucial for healthier relationships. If you’re continually bailing someone out to the point where it jeopardizes your own sense of security, it might be time for an honest conversation.
The same goes for other scenarios, like splitting bills with a partner or contributing to family events. It’s all about finding a balance between generosity and financial self-care. And remember, if someone reacts negatively to your boundaries, that’s a sign the relationship might need more open dialogue, not just more money.
8. Overspending on quick fixes
When I’m stressed, it’s tempting to just “treat” myself. A weekend getaway or impulsive online shopping can momentarily lift my mood, but this short-term relief usually comes at a price—literally.
These quick fixes rarely address the root cause of financial anxiety. Instead, they create a cycle: stress leads to spending, which then leads to more stress when the credit card bill arrives.
Breaking this pattern involves finding healthier coping mechanisms, like exercise, meditation, or even just calling a friend. If you really want to splurge in a small way, set a budget for those splurges.
For example, allow yourself a modest monthly amount that you can spend guilt-free. This way, you get to enjoy the occasional pick-me-up without sabotaging your broader financial goals.
Wrapping up
Feeling financially stuck isn’t just a numbers problem—it’s a mindset and behavioral issue that can persist no matter the size of your income.
Changing how we relate to money often requires a shift in perspective, along with a willingness to examine and adjust our spending habits, self-talk, and relationships.
My own journey has taught me that it’s possible to break free from the anxiety and constant worry by focusing on clarity (tracking expenses), positive self-belief, and genuinely thoughtful spending.
If you recognize any of these eight mistakes in your life, take heart in knowing that small adjustments can generate big results over time. There’s no overnight cure, but each step—from learning to talk openly about finances to setting boundaries with family—helps you build a stronger sense of financial well-being.
With consistent practice, you can start feeling more secure, more optimistic, and far less “broke” in your day-to-day life. Remember, each positive move you make is a powerful investment in your future peace of mind.
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