Things which can hurt you financially...

Money is very important to anyone’s life and we need to be careful while using or misusing it. There are many things which can hurt us financially. Whatever we do matters for our financial well/not well-being. However there are certain things which if we are not knowing/ignoring it hurts us most financially, let’s understand those things.

1. Thinking we can be earning forever and don’t plan for the retirement. If we don’t plan for our retirement at our early earning stage when we are earning decently we may end up with nothing when we actually need it most and may not be physically fit to earn. Remember the inflation which is a big spoiler.
2. Having an emergency fund but don’t know what emergency means. We have kept the fund for emergency but keep on dipping from it every now and then for a new TV/Mobile or outings. We may be using it recklessly without realising the importance and relevance of emergency fund and when there is a real emergency we actually don’t have it.
3. We make the budgets but don’t stick it. Normally we all have habit of making budgets (out of passion) at the start of the month but by the middle of the month we are spending on parties’ outings/shopping’s and so on without remembering what we have promised ourselves to do. Best way to solve this problem is by keeping aside our investments at the start of the month and spend only the remaining part. Remember; Income – Investments should be Expenses, not the other way.
4. We keep on buying without realising the actual utility of those things. We always want to have latest apple mobile phone/ ultra HD TV/new Car and anything new launched in the market. We like to show off the things and in the way the old ones which were bought few months or may be a year back are just lying on the corner of the home.
5. Its not just us…but our family i.e. wife, kids who will determine our finances. How our family members are spending or saving on various things also matter equally, some times more about our finances. So financial education is not just for our self but for the family members also.
6. Living on month to month basis. We are so dependent on our monthly salary that we don’t see beyond it and just manage the cash flows on monthly basis. There is no plan for future goals and how to achieve it…its like living on today without bothering for tomorrow.
7. No control over our own finances. Some time we are more influenced by our spouse/parents or friend with regard to own finances and in the way losing the focus of our own financial priorities/objectives.
8. So we started saving money its good but that’s not all needed for achieving financial goals. Savings are different from investing and for long term financial goals. We need to put the savings on work by investing it in a proper way.
9. Keep on investing on different types of assets without knowing the return and risk profile. It is like keep on moving from one road to other but have no idea where we are heading to. We need to know the risk and return of our portfolio.
10. Investments is a way to make your money work for you and yes it carries certain risk however in any part of life we have to take certain degree of risk to achieve goals. As we all know plane is riskier than car and car is riskier than a bicycle however still to achieve a distance of 5000 km we have to use a plane whatsoever risky it is. Understanding the risk and accordingly managing it properly is the smart way to achieve the goals. Similarly for short term goals debt based securities are suitable while for long term objectives we need to invest in equities.
11. Thinking managing money is child’s play i.e. taking it very lightly and doing by ourselves even though we have no proper knowledge of investments. Like Doctor is required for a good health and to keep you out of illness similarly Financial Advisor is required to keep you away from unnecessary risks and make you wealthy. Understand the importance of Financial Advisor and use their expertise rather than doing everything on our own.
12. That one stupid career mistake – like misbehaving with a woman – can destroy you financially, as well as socially and professionally. So be careful for small –small things you never know which one can hit us where.