Regrettable Financial Mistakes We Often Commit

Not paying off your credit card bill each month can be suicidal.

There’s no doubt that the Netflix is one of the best financial decisions of the last two decades. The concept has earned the subscription-based movie and television show rental service more than 23 million subscribers, making it one of the most successful dot-com ventures since the emergence of the Internet.

As I’ve wandered through the business landscape over the past one decade, I’ve often observed people making financial decisions that I was pretty sure were going to end up somewhere between bad and appallingly, astronomically bad.

Almost without any rare exception, my bad decisions and those I’ve seen others make resulted from one of these three things. The decision-maker: 1) didn’t bother to gather the relevant facts; 2) making unlawful assumptions based on ego, and didn’t trust the input of their own family members and friends.

Here, I have listed some regrettable finance mistakes that people often make and you should avoid getting trapped.

Emergency Fund:

There are a number of places for the short-term safe investment. Remember, you should only place your emergency fund somewhere that you can retrieve it pretty quickly without much risk to your capital.

Have an Emergency Fund to be Prepared for the Inevitable!
Have an Emergency Fund to be Prepared for the Inevitable!

One such place is an online savings account. There are a number of great online savings accounts that deliver quite a bit more interest than you’d find at a physical bank or credit union. That’s just one idea of where you can keep your investment safely. I would recommend that you can take some online help as well to learn about some more places you can keep your emergency fund money. But don’t just stop there – act on what you learn and get your emergency fund moving in the right direction. The thing is, everyone has a big financial emergency at some point. That’s why you need to prepare for inevitable.

DIY Investment:

Trying to be a DIY investor when you’ve no clue what are you doing is really dangerous. It is like attempting an open heart surgery after watching a video on YouTube. It amazes me that with the ability to do a quick search online that many investors are still putting their money into investment products and they don’t understand how they work. I know some investors who have invested a large chunk of their life savings into something that they couldn’t explain to a friend or neighbor.

Don't be a DIY Investor when You’ve NO Clue about What are You Doing!
Don’t be a DIY Investor when You’ve NO Clue about What are You Doing!

Do your homework, get a second opinion, and make sure that you understand how this investment works. How much is it going to cost you? Is there any surrender or hidden charges? These are the types of answers that you need to know.

Credit Card:

Not paying off your credit card bill each month can be suicidal. This is something that everyone struggles with in their life. And, People eventually end up with paying hundreds of dollars of unnecessary interest. Unfortunately, a lot of people don’t take the time to figure out how much interest they are paying. However, if they found out, they’d probably want to pay off their credit cards pretty quickly.

Not paying off your credit card bill each month can be suicidal.
Not paying off your credit card bill each month can be suicidal.

Paying off your credit card bill quickly can be wiser. The beauty of doing this is that it will help you keep more money in your wallet instead of giving it over to some big brands. Some people can’t control their credit card spending. If that’s you, it’s best to stay away from credit cards altogether.

Saving and Retirement:

Retirement Planning Needs to start early in Life!
Retirement Planning Needs to start early in Life!

Retirement is something, you need to be ready for and treating it like a distant second cousin can be lethal for rest of your life. Saving for retirement is critical. If you’re trusting social security as your sole source of income, think again. You won’t be able to maintain the lifestyle you dreamed for. So, even if you can invest only INR 1,000 in a month, do it, don’t wait.

Conclusion:

When you are planning on your budget, many of above-mentioned expenses might come to your mind. Don’t just forget about them. Plan something that can help you manage the unwanted expenses. If you have a high internet connection, see if you can get a discount. If you have a gym membership or golf academy membership that you’re not using, consider exercising at home instead. It’s important not to deprive yourself. It makes you over calibrate in another way when you begin spending again. There’s nothing wrong with going out with your friends and colleagues. It’s all about moderating it. There are plenty of ways to economically go out with friends and enjoy the moment.

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One thought on “Regrettable Financial Mistakes We Often Commit

  1. Lots of great points here. I did a similar post a few weeks ago with some of these topics as well as others. I believe the trial and error way that most young people use to learn about money is the most dangerous thing u can do

    Like

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