Financial Mistakes We Should Avoid To Secure Our Lives

by Shiv Kukreja on March 26, 2018

in Insurance

Life without mistakes is a myth. All of us tend to make mistakes at every stage of life – from childhood to adulthood. But, with every mistake we make, we get to learn a new lesson and become wiser and more experienced. While childhood mistakes do not matter, mistakes we make in adulthood matter and sometimes lead to hamper our quality lives, especially if they are financial in nature. Let us go through some of our financial mistakes and try to learn from them.

Not Living in the Present

Often, we regret our past mistakes and worry too much about repeating them going forward. In the process, we tend to ignore the fruits of the present. In short, we do not enjoy what we have or make any meaningful life derivative from our today. For example, our worry about the financial uncertainties, or the fear of probable financial concerns in the future. It may or may not happen. Hence, we continue saving money from our limited sources of income.

Future is uncertain – we all know that. However, by restricting access to our own income in the present, through savings, is not such a smart thing to do if we do not approach it wisely and prudently. We ought to invest, not save. It is important to ask yourself how much savings and investment we should do in the present to safeguard our future income or other monetary requirements. In that sense, you must let your money grow. The only compounded growth of your income must give you the satisfaction of savings/investment in the present. It is not only our income which is uncertain, but also our future which is not in our hands. We can only do as much to safeguard our future expenses and real-time requirements.

Blaming the Past for Your Present

Learning from the past mistakes holds the key to a practical future. There is no point in ruining your present because of the mistakes you made in the past. If you have still not saved and invested money, there is no point cribbing or blaming yourself for it. A better approach is to start planning for today.

Moreover, it is better late than never. Fortunately, there are many financial instruments, including a mutual fund SIP or a life insurance policy, which you can buy for a fixed tenure at an early stage of life, say age of 18 years or so. Though there is no age limit as far as mutual fund investments are concerned, insurance companies however do set an upper age limit to buy an insurance policy. So, if you have not invested so far, there is no point delaying it further to secure a financially stable future.

Not Building Your Future

While budgeting for your family expenses, you should consider the depreciating value of money. If you are just living by the present standards of living, and not considering the money needed to secure your future, you are making a grave mistake of not having a sound and viable living in the future. There is a need to invest, and there is a need to do that smartly. By choosing to spend your time and money only on the present, is like turning a blind eye to the road of life ahead. It can be full of minor bumps and more significant uncertainties. A life insurance plan, for example, is a prudent investment to have monetary access in the future as well. You need to evolve financially for a safe and secure future.

Not planning for the Worst

The proverb, hope for the best and prepare for the worst, has a different connotation when you are planning to budget or invest in the future. It should be hope for the best and plan for the worst. One should be optimistic in life, agreed, but that should not deter you from planning for the future especially when it concerns the matters of finance. It needs more time and effort for you to prepare for the life ahead. Life is full of uncertainties and to cover up financially, you may need the assistance of an insurance policy to help you overcome any real obstacle in the needy times.

So, an insurance policy can provide you financial assistance and protection against life uncertainties like death of the bread winner (giving money equivalent to the value of your income at ‘that’ given point of time), simple savings plans, retirement plans, health plans, thus, ensuring the fact that you have money when you need it the most.

{ 8 comments… read them below or add one }

Rajeev March 28, 2018 at 3:09 PM

Financial Planning is a process achieving your financial life goals by aligning your finances with them. It means that you create a roadmap for your life which includes your goals. So it is very important to make a good plan to secure your future. The points explained in this article are seriously important. I think everyone should follow these points to avoid financial mistakes.

Reply

Vivek April 4, 2018 at 2:47 PM

Well said, Rajeev,
If we follow these steps maximum we can cower our financial mistake.
Hellow Shiv Kukreja, really very good article. I like the way you explained here.

Thanks. Please keep sharing.

Reply

Richa April 25, 2018 at 4:22 PM

Hi, I am working in IT with 30% tax bracket. Also, doing software consultation in India and US. Getting paid from the US in Dollars and India in Rupees. Q1. How should I pay my taxes?

For my consultation work one of my client deducting the tax at 10%.
Q2. Can I have two tax deductions from two companies?
Thank you for the help.

Reply

Salim May 9, 2018 at 11:38 PM

Nice information sir

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Dhiraj Patel May 15, 2018 at 5:10 PM

A Systematic Investment Plan allows you to invest regularly a fixed sum in your favorite mutual fund scheme. In SIP, a fixed amount is deducted from your savings account every month and directed towards the mutual fund you choose to invest in. It allows you to buy units continuously without worrying about the market ups and downs. Not only does investing in an SIP bring financial discipline but also helps you plan your budget and expenses better.

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Amit Kumar Bansal July 14, 2018 at 3:18 PM

Nowadays the only problem among people is “Not Living in the Present”. If we go deep into this topic we realize what we lost. Nice information.

Reply

Rajesh kumar August 9, 2018 at 1:03 PM

Shiv, you presented a very detailed article here. If you discuss about over usage of credit card and paying on huge interest is a big financial mistake that most of the corporate employees do. To all thos people out there i have a suggestion.
Apply for a personal loan interest rates starting at 11% and may vary on other factors as well. It is better to pay 11% – 14% rather than paying 36% for credit card I have done the same

Reply

Priytam Kumar August 13, 2018 at 11:48 AM

Well Said Shiv Khureja Sir
A Systematic Investment Plan Makes Your future Better. You Need instant Personal Loan for making better Present.

Reply

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