Mistakes are part of human nature and people say you learn from your mistakes. But in finance, your one mistake can cost you a lot. Rightly said by someone that, “Taking precaution is better than to say sorry”, so here is a list of mistakes that you should avoid as a beginner.
Many people believe in living in the present and so they keep spending money here and there. You definitely cannot rely on anyone to take up your expenses after retirement. So it’s always better to invest your small amount in any investment scheme which will help you after your retirement plans and financial goals.
It is very important to understand the concept of an emergency fund and why you need to create an emergency fund. Many of us do not create an emergency fund, all we focus is on what is going on right now in our life, our current needs, and future plans but many of us do not think what will happen if there is a crisis of any sort. Some people during crisis withdraw money from their investments such as fixed deposit which will completely disturb their financial plan. You should not withdraw money from your investments to avoid penalty. If you already have some emergency fund, it will not hinder your financial planning in a crisis.
Credit cards make our life easy and convenient. Having a credit card seems very fancy but it can push you into debt traps. You should avoid the use of a credit card for a paying small amount. If you keep using a credit card for every small thing your credits will pile up and in the end, you will have a huge amount to repay. And you will be in a problem if you are not able to pay the amount. Your use of credit card will also affect your credit score and show up in your credit history.
When you want to invest in anything make sure that you are aware of investment because you will be just giving asset but rest other work will be done by your financial advisor. Many people do not know where they have invested when asked. This is because you totally rely on your advisor and do not discuss your investments with youradvisor.
Many of us do not have the habit of tracking your financial habits. You should track your finance to understand where you are in terms of spending genuinely and where your spending are not worth. You should write down or record your salary amount and then write down about your EMIs, your expenses and should create a month saving goal this will help you to buy things that you genuinely need and also save some amount of money.
Now when you know the mistakes that you are likely to commit, you can take care of it and try to avoid mistakes that can push you into problems or cause you any inconvenience.
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