Always Broke? Stop Acting Rich and Risking Your Future

Are you trying to act like you’re rich? Your friends, co-workers, and neighbors might be impressed with you, but your bank account surely isn’t. If you don’t get a handle on your spending now, you’ll put your financial future at risk.
Before you can become wealthy, you need to develop a wealthy mindset. Pretending to be rich so you can fit in will only set you back and keep you from reaching your financial goals. If you address harmful financial behaviors now, you can rescue your finances and be well on your way to obtaining financial freedom. Here are ways you’re trying to act rich and what you can do to save your financial future.

Frequently eating at fancy restaurants — and paying for your friends, too

dinner at a restaurant
Slow down on the dinners out. |

Do you insist on only dining at the best restaurants and snub any place that doesn’t have cloth table coverings? You might try to impress friends and acquaintances by limiting your dining experiences to high-end restaurants. And if you really want to leave a lasting impression, you also pick up the check. You might feel good about covering the meal, but your dinner companions might start to expect this treatment all the time. Eventually, no one will be reaching toward the table when the check arrives. They’ll be looking at you.

Do this instead

friends wearing pajamas taking selfie
Save money by spending time at home. |

If you and your friends eat out often, suggest mixing things up a bit. Save money by staying home and cooking a meal. Each of your friends can take turns cooking, or you can ask each person to cook something and bring it with them. You’ll not only save a ton of money on food but also transportation. It’s a win-win. Rather than focusing on proving your worth, spend time with your friends, enjoying the experience.

Wearing only full-price, name-brand clothing

happy woman with shopping bags
No one can see the tags. |

Is anyone really going to walk up to you and check the tags on your clothing? Probably not, so stop worrying about which designers you’re wearing (or not wearing). There are plenty of retailers who sell inexpensive clothing that looks just as good as full-price, name-brand outfits. What’s important is you’re neat and clean. It’s really OK if you’re sporting last season’s outfit.   

Do this instead

woman holding shopping bags
Try shopping at outlet stores. |

If you must have your name-brand items, you can always attend a sample sale, shop in your local department store sales section, or shop at an outlet. You could also try something you might not have thought about: wearing the clothes already in your closet. When you shop constantly, especially without stopping to peek into your closet every now and then, you run the risk of buying redundant items. This is a costly habit.

 Mindlessly spending windfalls

That rich feeling only lasts a moment. | Chung Sung-Jun/Getty Images

Do you spend every windfall you get? Just because you have a little extra cash in your pocket doesn’t mean you have to treat yourself. You might feel rich, but that feeling lasts only as long as your money does. You might have taken the encouragement to “treat yourself” out of hand, and it’s hurting your ability to build wealth. It’s OK to give yourself a reward every now and then, but getting through the work week isn’t enough reason to blow your paycheck on a new wardrobe.

Do this instead

Businessman presenting financial analysis with charts
Save and invest windfalls. |

You have other options besides going to the mall or buying a new tech gadget. Instead of rewarding yourself with treats, focus on your future. Where do you want to see yourself five years from now? Is that treat going to move you closer to or further away from your goal? Instead of automatically spending your cash, make a plan to save and invest that money. In a couple of years, you’ll have more money in your nest egg.

 Using credit cards to finance your lifestyle

 couple embracing at sunset
Don’t use credit to finance your lifestyle. |

It might feel good to flash your name-brand clothing, eat at fancy restaurants, and charge to your heart’s content. However, at the end of the day, you’ll likely be staring at a pile of receipts, wondering where you’re going to get the money to pay for what you bought. Relying heavily on credit is one of the worst ways you can try to act rich. Or maybe the good life caught up to you, and you’re putting purchases on your cards just so you can afford basics, such as groceries.

Do this instead

$100 bills
Stick to cash. |

Resolve to live a cash-only lifestyle until you learn how to handle credit responsibly. If you can’t afford to pay for something in cash, don’t buy it. Another trick to wean yourself off your credit dependency is to leave the plastic at home. This will help remove the temptation to automatically reach for your cards without even thinking about whether you have the money to cover the purchase. Having a set amount of cash in your pocket forces you to stop spending when there’s no more cash.

Buying or leasing a high-priced car

 car shopping
Stay within your budget. | Joe Raedle/Getty Images

Many people mistakenly think an expensive car is an indication of wealth. Consequently, they dig themselves into an unbelievable amount of debt, so they can get the car they saw a neighbor or a top-performing manager at work driving. But what’s the point of struggling to make payments on a fancy car that will leave you so strapped to survive you might have to live in it?

Do this instead

person cycling outside
Try biking to work. |

Simply buy what you can afford. Your focus should be on whether a vehicle fits within your budget and is able to get you where you need to go. (It should also pass all the necessary safety and quality inspections, of course.) As an alternative, try taking public transportation whenever possible or even riding your bike to work. Get out, meet some people, and get some fresh air. You’ll save money on gas, and you might make some new friends. Just don’t make a habit of treating them to fancy dinners.
 Follow Sheiresa on Twitter @SheiresaNgo.