Common Financial Mistakes Which Lands One in Trouble
There are certain mistakes in life which impact the happiness of an entire lifetime. Especially financial mistakes have a much negative impact as it affects the quality of life, health, happiness and peace of mind. Let us see the list of financial mistakes one should avoid in a lifetime:
Excessive spending: Expenditure must be proportionate to the income. It should not be equal or excess of income. Stinginess should be certainly avoided. But too much of lavish parties, frequent dinners in expensive restaurants etc. will push a person to start borrowing.
Excessive borrowing: Of course life cannot be run without loans. But the borrowing can be done for meeting emergencies and for productive purposes. People who develop a taste for excessive borrowing will end up in bankruptcy.
No financial planning: A proper financial planning with goals is a must. When there are no clear goals, one will face frequent money-less situations. Often people end up without thinking about rainy days. Once there is no provision for days when there would be a stoppage of income, one will end up suffering at older days.
Excessive risk taking: People who all the funds in too many risky investments will always end up losing the whole of their money. Risk should be taken only on a calculated basis.
Emotional decision making: Humans are prone to make emotional financial decisions. Such decisions may not always end up as a good. Technology has developed a lot nowadays. Even investment decisions can be taken by an inbuilt automated trading robot in apps like BTC profit. Bots are not subject to emotional decision making.
No savings: Persons who end up spending everything they earn commit the biggest financial mistake. Savings are mandatory for rich as well as the poor. A portion of income has to be set aside to meet future needs.
Unplanned shopping: Unplanned shopping leads to unwanted purchase which is a waste of money.
Credit card usage: Using credit cards for meeting one’s daily expenses is a bad financial sign. Credit cards should be used sparingly. Such frequent usage will lead to uncontrolled expenses.
Pressure and panic factor: People who spend or invest due to peer pressure or panic will incur losses. Cool thinking and informed decision making are required for all financial decisions.
Knowledge: Entering into any financial area like a loan, investment, trading etc. without sufficient knowledge is like locking oneself in a permanent dark room. Never try any financial product without full knowledge of the same.
Greediness: Desire to earn super profits will not always work. It can lead to the mistake of investing in Ponzi schemes.