5 FINANCIAL MISTAKES TO AVOID

“A wise person should have money in their head, but not in their heart.”

Rationality often goes for a toss when you see this message hit your inbox: “Your account has been credited with ?XX.”?

You send your analytical brain on a sabbatical and let your impulsive heart take control. Spends go on overdrive, and savings take a backseat.?

Here are 5 common misconceptions that YOU can clear in your head while making those big & small financial decisions:

1. WHO NEEDS A BUDGET?

If you are one of those people who think money can be managed without budgeting, you need to rethink. Let’s say, you’d like to own the latest drop in the sneaker world. You’ll need to identify exactly which corners to cut before you hit “Add To Cart”. Wishlists can move to your final cart only if you prioritize your expenses for the month accordingly. Clear all mandatory expenses first, see how much you’re left with, and then let that impulsive heart take control.?

2. IMPULSE BUYING IS THE NEW THERAPY

Start by asking yourself: “Do I REALLY need it?” Almost every time, the response to that should make things simple. But we know it’s easier said than done. We know what temptations can do to our never-ending greed. It’s a no-brainer that impulse buying is a surefire way to drain your money. Keep a cap every month based on the money you’ve earned and your mandatory spends. Let your heart take a backseat, and let your brain call the shots.

3. IGNORANCE (OF YOUR DEBTS) IS BLISS: Debt does not cease to exist because it is ignored. Ignoring debt is a big mistake that can have severe consequences and it will only lead to more financial stress and problems down the road. Make sure you have a solid plan to pay off your dues for the month first. It’s a mandatory liability, you should not spend a single penny before clearing your dues - be it your credit card bills or the 37th EMI of your education loan.

4. IGNORING THE ‘UN’ IN UNEXPECTED: As the old adage goes, “hope for the best and prepare for the worst”. Unexpected events can occur at any time, and it is essential to be prepared financially. You should set aside a part of your income for an emergency fund to cover unforeseen expenses.

5. WHO HAS THE TIME FOR RESEARCH?: It’s okay to not understand everything about investments and seek help. However, it’s not okay to say “Research is a waste of time and I will just invest where my friends are investing”. A comprehensive market understanding is crucial before you put your hard-earned money somewhere for a long duration. Seek professional help if need be, but know where you’re putting your money and how it is likely to behave.

For more tips & tricks on how to handle your money better, keep an eye out for our next post.

#MobiKwik #FinancialDecisions #MoneyManagement #FinancialFreedom #FinancialSecurity