Skip to main content

19 financial mistakes to avoid in 2019

You can also read this on BeingFinWise

___


 As the new year begins, I wish everyone a very Happy New Year. 

 I am hoping that this year, I'll make better financial decisions & hopefully people reading this will also do so. One good first step can be to avoid making bad financial decisions and keep improvising. 

 Here are some financial mistakes one can do well to avoid in 2019 (in no particular order):
  1. Spending more than what you earn. (Rule # 1 of personal finance!)
  2. Not investing the saved money, and letting it be idle in savings bank account or worse, as physical cash.
  3. Taking debt like personal loans or keeping credit card outstanding - consequently unsustainably living in present with your expected future income. (with an inflated cost, thanks to high interest rate!)
  4. Leveraging/ borrowing for speculating (speculations often masquerading as investments, e.g.  speculating in stocks, or worse, derivatives, crypto currencies etc.)
  5. Not having a risk management plan. In other words, have a health insurance (must have) and term plan (if you have dependents).
  6. Chasing get rich quick schemes.(As a rule of thumb I view anyone offering over 12% per annum with suspicion. Evaluate things before jumping into it, especially if there is a financial commitment needed)
  7. Chasing a investment category because everyone else is chasing it.
  8. Taking claims at face value. (e.g. "assured" returns from stock markets, as brokers claim or buying the apartment you "deserve",  as the glossy brochures proclaim)
  9. Addiction - excess of alcohol, smoking, gambling (ideally, keep off them altogether!)
  10. Impulse buying to an extent that it drains your finances by month end.
  11. Not paying enough attention to your health. Cost is more than just financial. 
  12. Being a signee/ loan applicant for someone else (You may not want to repent few months/ years down the line!)
  13. Jumping to buying home for "investment" by taking home loan soon after starting to earn. (It can constrain your flexibility & and keep burning hole in your pocket)
  14. Failing in basic budgeting and tax planning. (and wondering where the money goes!)
  15. Not having an emergency fund. (Have at least 6 months of emergency fund accessible to you)
  16. Lending money to friends, especially for frivolous expenses. 
  17. Chasing the latest smartphone, bike, gadget, and so on. (see how easy it is to fall into lifestyle trap, and if your income doesn't support this, into a debt trap
  18. Not having any financial goals (Corollary- groping in the dark as far as your investment philosophy & approach is concerned)
  19.  Underestimating the power of inflation & not realizing the cost of living in future. 

This list is mostly based upon my observations and readings. Disagree with the list? Have anything more in mind? Do share :)

Wishing you a happy and healthy 2019 again! 

Comments

Post a Comment

Shop @ Amazon

Popular posts from this blog

Random Birthday thoughts

As I would have cribbed @ 1000000000 words per day, I am currently at a place called Jhunjhunu where I have no social life to speak of, internet is the only thing that keeps me going, apart from few random movies or episodes of Seinfeld. So prospects of celebrating birthday in this solitary confinement are not that exciting! Too add to that, as I switched on my laptop yesterday night, I realized that it had conked off and is showing fan error as the reason. For me this was the end of world. And I knew not how would I survive! I hoped the issue will get sorted out in a week but it is too much to ask in this small town and this time period seemed to be an extremely optimistic guess. My birthday eve and early morning were spent on developing strategies on how to get it repaired. I couldn't find any IBM authorized dealer here, and I would have needed to send it to Delhi. There were two options - first was about sending it as a parcel to one of my friends at IBM , either directly or i...
9 comments
Read more

Survival

Dark clouds were looming at the horizon. In few minutes they would have traveled few miles in westward direction and came closer. This is not usually the scene at noon in the hottest month of the year. Dark clouds meant something ominous. Probably sign of an impending storm or maybe a cyclone approaching. Sea is a capricious lady. Bay of Bengal was no different. It was infamous for cyclones, and Orissa was often at the receiving end of nature’s fury. Ramdas was few miles into the sea. So were his brethrens of the fishermen community. There were around a hundred boats in the sea that day. No one anticipated the storm. So no one even thought of staying back at the shore and miss out on their livelihood of the day. Ramdas was alone in his boat. He owned the boat. His son helped him with his job. They managed to get enough as to earn a square meal a day. They had a good rapport with others of fishing community. But of late that relationship was breaking down. No reasons for that. Nor wa...
8 comments
Read more

Somewhere @ Nowhere - The Book

FINALLY .... After a tryst with so-called-creativity, I have come up with a book -  Somewhere @ Nowhere. You can have a sneak peek at the story & a few pages from the publisher's website and order the same & get it home delivered anywhere in India/ Abroad. Details as mentioned below- - Preview and get the book home delivered from HERE Also, you can join the following groups - - Orkut Community - Facebook Page Hope you like the work. Would appreciate a feedback. Till then ... Happy Reading!!! And yeah, please spread the word (relying on word of mouth & word of blog publicity) :-) ___ Update (18/02/2010) - Thanks for the initial response to the book :) Update2 (25/ 02/ 2010) - Thanks for the feedbacks on the book those who have read it. (hope to get a feedback by others soon). Encourages me to overcome inertia and write more! Meanwhile, those who ask for why is it currently not available in traditional retail outlets - well, I hope it wil...
15 comments
Read more

The story behind credit card debts & personal loans

Any one with even an iota of interest in personal finance & its workings would probably know that credit card debts and personal loans are usually the worst kinds of debt traps that you can fall into. Yet many people fall into that trap again and again. Many people do come out of it eventually but some don't & this becomes a part of their "lifestyle". That you are eventually paying much more than you need to, if you default on credit card payments intentionally or unintentionally (probably @ 36 % per annum or something similar) or take a personal loan (say, @ 12% per annum or so) is not hard to fathom. However behind these numbers, there may be even a deeper story - that usually that of not having control over expenses or not having created a buffer amount. While there may be some pressing need like unplanned or recurring medical expenses which fuels sudden demand of money or an unexpected job loss, in many other cases this need may be fueled by lack of plani...
12 comments
Read more

An area of darkness ?

The title of this post finds its origins in a novel with simlar name written by VS Naipaul. Set in India, some 40 years ago or so, this is a kind of travelogue of author's brief stay in India where he found it to be full of superstitions, ignorance and darkness! Many decades and many MNCs and malls later, few parts of India seemed to have chucked off that tag, but there are many places that haven't and continue to remain shrouded in ignorance. Move few hours away from a city, travel in a second class train compartment or a dilapidated state transport bus and you get to see the dark underbelly of India Shining. As one of the characters in the movie Rang De Basanti says "Yahan zinda rehne ki jung mein logo ki zindagiyan nikal jaati hai" . So true it seems! My day today was spent being kind of lost in similar thoughts. To start with, I when I boarded the ST bus, a woman was wailing. She may be in her 20s or something, but she was crying in some peculiar musical tone. At...
13 comments
Read more