3 Lifestyle Habits That Make You Worse at Managing Money

by Miranda Marquit · 6 comments

We often think about money management as something that happens separately from everything else in our lives, but nothing really exists in a vacuum. The truth is that our lifestyle habits can have a tremendous impact on the way we manage money. Live right and we will make the right choices. Live on the edge and our finances will suffer too. Here are three lifestyle habits that can make us worse at taking care of our financial resources:

1. Lack of Sleep

One of the biggest ways you can make yourself worse at managing money is to neglect your sleep.

Not having enough sleep could be a big problem when it comes to making decisions. Tiredness reduces your ability to think clearly and make sound judgments. On top of that, being tired lowers your willpower.

If you don’t get enough sleep on a regular basis, there is a good chance you’ll find it harder to resist the temptation to spend. Plus, you might not think clearly when it comes time to make a purchase.

Don’t make financial decisions when you’re tired and overwhelmed. You’re more likely to make impulse purchases and even choose a poor outcome.

The bottom line is that you need to wait until you’ve been able to catch up on sleep before you decide on a major financial decision. It could be costly to do so otherwise.

2. Poor Nutrition

Did you know that what you eat can influence how you think about things, and the way you make decisions?

It’s true!

Being on a diet high in fat and sugar can actually make you worse at managing your money.

When you eat a lot of food that isn’t very good for you, it’s likely to make you sluggish in mind as well as body. It also lowers your willpower. As you probably know, willpower is very important when you want to resist impulse buys and when you want to avoid making poor snap decisions. Can you imagine being tired and loading up on sugar?

On the other hand, a healthy diet can boost your ability to make good decisions and think through problems. If you’re facing a money problem, you want your brain working at a high capacity. Lean proteins high in omega-3 fatty acids can improve your brain function, which is why you should have more of it if you want to make good financial choices. Think eggs and Greek yogurt instead of red meat. And when you do have a steak, it’s better to choose the sirloin instead of that 36 oz cowboy bone-in rib eye.

When your brain is functioning well because of your nutrition, you are far more likely to make better decisions, think through your financial plan, and avoid money disasters.

3. Poor Relationship Management

Don’t forget about the impact your relationships have on you. Difficult relationships are worst, because you could feel stressed and have anxiety a lot of the time. You might also sleep less and eat sugary foods more often. This might lead you to spend more than you should in the name of “retail therapy.”

Even if you are in a mostly healthy relationship, your ability to manage your money can be impacted when you are inevitably under stress. Be careful of times when you might be fighting, or discussing something difficult with your partner. A bad day or a fight can lead to clouded judgment and poor money decisions.

Your lifestyle habits impact your state of mind and your ability to cope with stress. You need to be able to deal with money problems constructively, as well as make better long-term decisions. The right lifestyle habits can help with that, but you need to make a conscious effort to build these habits into your routine until they become second nature.

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{ read the comments below or add one }

  • These are so true. Being off point with nutrition and sleep doesn’t help me when it’s time to make money or make important money decisions. It makes you more wasteful when you’re not functioning at your peak.

    • David Ning says:

      This is so true. I’m a bit tired as I type this and I find it harder to think of the right words to put on screen. No one will ever be able to calculate the difference increased productivity makes but make no mistake – the difference is significant.

  • Wow, not what I expected, but all very true. I think most of these are chicken-and-egg situations, like Anders has pointed out about #2. Lifestyle choices impact our financial situations, and vice-versa. But we have to start somewhere, and eating well really doesn’t have to cost more than eating poorly.
    Great post, thanks Miranda.

    • David Ning says:

      You can definitely eat well without costing a ton but you will have to do some work. All the convenient choices are usually the unhealthy ones and that’s what trip most people up. Spend some time preparing food again like how everybody used to do it and we will all be healthier and richer.

  • Anders says:

    Thank you for the post! These are interesting aspects of money management and ones I have not seen before, to be honest.

    I have to argue a bit though I’m afraid, about the second item concerning food. First off, I want to agree that I believe there could be a strong correlation with bad nutrition and bad money habits. Partly because people who have tendencies to not take care of their dietary needs are less likely to take care of other areas of their life, for instance, money. But this could also be related to statistical problems, where people who have less money chose to buy cheaper, and often less healthy food.

    I also agree that sugar is bad, as it amps us up and might cause us to make impulse decisions we wouldn’t normally do, without a potential sugar high. However, saying that high-fat diets cause the same effect is a bit rash I think. I’m on a high-fat diet myself and I like to think I’m rather good at handling money. I don’t mean to sound defensive here, but you know how diet is linked to personality. 🙂

    I understand that with your article you might not mean diets that are based on fat, but that if you get high fat and sugar for instance. Or just overall crappy diets.

    I just wanted to add this side of the coin too, so to speak.

    Take care!

    • David Ning says:

      Thanks for chiming in Anders! It’s interesting to note that in America, the average weight of those who are less well off are heavier than the norm while those with fewer financial means in most parts of the world are usually thinner.

      And don’t worry too much about general trends. I’m sure you are good at handling money as there are always exceptions!

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