Manage Money

Top 5 Financial Mistakes

"A person who never made a mistake has never tried something new," - Albert Einstein.

Top 5 Financial Mistakes

Mistakes and regrets - an endless vicious cycle that is common to each one of us. I have made innumerable ones, and still make a couple of them every other day. Financial mistakes are quite common and can be deadly. Since you are here reading this article, I am sure that you too have made some mistakes and you're looking for solutions now. We learn from our mistakes, right? Here are a few typical "Oh no!" moments in the finance field from which you can learn some important lessons.

Mistake #1: Not Researching Enough

Money matters can be very complicated and confusing. We often tend to consult a friend or an acquaintance or an expert for advice or suggestion. Unfortunately, this might backfire.

I have a friend who is passionately involved in the share market. When I wanted to invest some money in shares, he was my go-to guy. Taking his advice, I invested my money. A month later, those share prices fell beyond my imagination. That's when I learned a lesson - educate yourself and take responsibility for your own decisions. Nobody else would be as interested in your financial well being than yourself.

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Mistake #2: Ignoring Your Gut

Investing is an excellent way to build your wealth and grow your money. Investment advisers are abundant, but they might not be reliable all the time. Amidst a hectic life, consulting an adviser might be very convenient. However, there are moments when you get a hunch that things are not going on the right track. Don't ignore those gut feelings. They have a reason. You wouldn't want to take a wrong financial advice and lose your hard-earned money. Be sure in every way before making a decision.

Mistake #3: Delaying Investments

Life happens. And it happens rather too quickly. You must start investing when you're young. If you don't, you'll surely regret later. Money invested early has a huge potential to grow. Every penny counts. I had started my investments with a meager amount of Rs.100 a month. It's more about developing the habit of saving - the earlier you start, the better you pick it up. You must also have a retirement plan - start thinking of the end and work backward to make it work.

Mistake #4: Ignoring a Commitment

Getting into debt can be easy and scary, and getting out of it is extremely difficult. You must never ignore your financial obligations. It can affect your credit score and lead to severe consequences as well. Missing a payment can significantly impact your credit score. Ending up with a substantial outstanding amount is even more dangerous for your financial health. When you are fresh into the finance market, you might be a little careless or forgetful. Try not to make such mistakes. Repay your balance on time.

Ignoring a Commitment

To Sum Up

Everyone is prone to making financial mistakes - be it a novice or an expert. Learn a powerful lesson from those mistakes and improve your financial future.

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1. Build your Credit Score

2. Reduce your Current Borrowing / EMI Costs