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Money psychology

 


Money Psychology: Why Most People Stay Broke No Matter How Much They Earn

By Faraz Parvez
Professor Dr. (Retired) Arshad Afzal
Retired Faculty Member, Umm Al-Qura University, Makkah, KSA
(Pseudonym of Professor Dr. Arshad Afzal)

💡 The Truth That Few Will Admit

You might think that earning more money automatically makes you wealthy. But history, research, and real-life stories prove the opposite:

  • Doctors earning millions yet drowning in debt.
  • Celebrities going bankrupt despite multi-million-dollar incomes.
  • Professionals upgrading their cars, houses, and vacations the moment they get a raise—only to remain paycheck to paycheck.

The problem is not always the income.
The problem is the psychology.

🧠 Money Is 20% Knowledge, 80% Mindset

Finance books can teach you budgeting and investment. But if you think and behave like a spender, no financial formula can save you.

Money psychology is about understanding your beliefs, habits, and emotional triggers around money—most of which are shaped long before you start earning.

🔍 1. Childhood Money Programming

Many adults carry invisible scripts about money they learned as children:

  • “Money is evil.” → Leads to guilt when earning.
  • “We can’t afford it.” → Builds scarcity thinking.
  • “Rich people are greedy.” → Creates subconscious resistance to wealth.
  • “If I make more, I must spend more.” → Fuels lifestyle inflation.

Until you change these deep-seated beliefs, you will sabotage your financial growth—no matter your income.

🔥 2. The Trap of Lifestyle Inflation

The most common wealth killer:
When your income increases, your expenses rise to match it.

  • First job → Motorbike
  • First raise → Car
  • Promotion → Bigger house, overseas trips
  • Bonus → Latest phone, luxury brands

Result? No savings, no investments—just a cycle of spending that looks impressive but leaves nothing behind.

⚠️ 3. Emotional Spending

Many treat shopping as therapy:

  • Stress → Food delivery
  • Boredom → Online shopping
  • Sadness → Expensive night out

This is instant dopamine at the cost of long-term stability. You’re buying moments, not security.

📊 4. The Debt Mindset

Credit cards, easy loans, installment plans—these create an illusion of wealth while silently eating away at your future.
Some people even justify it:

“I’ll make more next month.”
But instead of making more, they end up paying interest—enslaving themselves to lenders.

🌱 5. Scarcity vs. Abundance Thinking

Scarcity thinkers believe:

  • “If someone wins, I must lose.”
  • “Opportunities are rare.”
  • “I should play it safe.”

Abundance thinkers believe:

  • “Wealth can be created.”
  • “Opportunities are everywhere.”
  • “Money flows to value.”

Scarcity keeps you trapped in small thinking. Abundance drives innovation, risk-taking, and investment.

📈 How to Reprogram Your Money Mindset

1. Awareness Audit

Write down every belief you hold about money. Challenge the negative ones with facts.

2. Pay Yourself First

Before bills or luxuries, save and invest 20–30% of your income automatically.

3. Separate Wants from Needs

Ask: “Will this purchase improve my life in 5 years?” If not, reconsider.

4. Invest in Skills, Not Just Stuff

Courses, certifications, business tools—they compound your earning potential far more than clothes or gadgets.

5. Surround Yourself with Financially Mature People

Mindset is contagious. Be around savers, investors, and creators—not constant spenders.

📿 Spiritual Wisdom and Wealth

Islam teaches balance—neither extreme miserliness nor reckless spending.

  • Avoid Israf (wastefulness)
  • Give Zakat to purify wealth
  • Earn Halal to ensure blessings in your income

A wealthy person without wisdom becomes a slave to possessions. A person with wisdom uses wealth as a tool for freedom, security, and service.

🌟 Final Words

You can earn millions and still be broke. You can earn modestly and become financially free.
The difference? Mindset, discipline, and purpose.

Wealth isn’t just about what you make—it’s about what you keep, grow, and pass on.

📚 For More Transformation:


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