Today, we are more focused on enjoying the luxuries of the present, and the services of our money.
Imagine one day you wake up in the morning, and there is mail from your company stating you’re no longer employed, or the bank has just informed you that they are going to auction your house because you failed to repay the home loan, or there is another scam at the Wall Street and all your stocks are falling and the companies are going bankrupt. Yes, we know these are scary scenarios, but are you ready to face any of these situations? No, a lot of you will answer that. Understandably!
Now, let’s look at some of the common personal finance mistakes that must be avoided so that you’re ready to face any financial crisis.
Not Setting any Financial Goals
Today, most of us are unaware of what we want? We don’t have any set goal for the investment that we do, most of the investment in the current time is just the reflex of how the market is behaving currently or based on some random advice by some random guy. Investing without any set goal can prove futile in the long run. For maximum benefits, you should first set an aim and then start investing.
Spending more than Earning
When was the last time you checked your bank statement before ordering your favourite pizza with pineapple, or when was the last time you thought of your earnings before buying anything? Most of us nowadays are indulged in mindless spending. Also, there isn’t any track of the spending, which again results in spending more than whatever you are getting. To have a stable financial journey, you always must spend less than what you earn, saving some funds for emergencies or unplanned expenses
Living on Borrowed Money & Paying Bills
You want a brand new I-phone, well, guess what you can get it. A brand new MacBook? Why not? Yes, all of this is possible with just a credit card! Earlier, a large part of the income was used to save for the future, but today that large portion is used to pay the bills of the moments or the luxuries we had back in the time on borrowed money. Spending 80% or more of your salary for paying credit card bills and EMIs, will surely not help you build the huge fortune you wish to build.
No Retirement Planning
Most employees today work in the private sector, and there is no pension fund that you will get after your retirement. So, what are your plans for retirement? Oh yes, there still are several years for it right? The biggest mistake is not planning the retirement early, in fact, you must plan for your retirement from the moment you start earning. There is no tomorrow for starting this investment as it is going to benefit you, the more time you will give to the pension investments the more returns it is going to give you post-retirement.
Not Monitoring or Maintaining Credit Reports & Score
Every month your bank sends you the bank statement and there is more than a high probability that most of us don’t even open it. We don’t even take a detailed look at our credit card bills, we just pay. A big mistake to avoid, why so? Because giving it a cautious look will give you a chance to cut off some of your unwanted expenses. Also, there is a credit score that financial institutions like banks and NBFCs look upon while giving you loans, so you should always try to keep that score 750+.
Avoiding Financial Education Consciously
With a rise in the spending power of an individual, you must have the knowledge of where you are spending and how? Today, a lot of you are trying to invest, spend logically, aim for some financial goals, without the right financial knowledge. Investing works best if there is learning from experts. There is an old saying “the one who learns from other mistakes are ought to go more forward”.
Now that you know what you should avoid, start investing for your future, start saving, start spending with a conscious mind, and set financial goals.