Mistakes are wrong judgement or misunderstanding. In case of financial decisions, people made many mistakes which are known to be finance mistakes. Financial planning is the most important and basic key for your future successive goals. Investment plays a vital role in financial situations. When you are looking to secure yourself in financially situations, most probably at that time you commit mistakes. That mistakes become a great loss. Lack of knowledge about a particular thing is the biggest financial mistake. Here you will find a lot of common personal finance mistakes which are as below. Be aware from such kind of mistakes.
10 Common Personal Finance Mistakes:-
Buying property through loans:
Generally people thought for their property like gold, house or other land. According to them, Investing on property is a right way. They bought these via EMI’s and loans. This is the one of common personal finance mistakes because 30% to 40% will deduct from your monthly income. This can become great issue in your financial situation.
No Emergency funds:
Nowadays, everyone is just thinking about earning money. May be you are also one of them. Nowadays, people are investing more than their earning. When they need emergency funds like for health issues, they don’t have savings. At that time they suffer from personal loans which become a strain on their finance. Investing more than saving is one of common personal mistake.
Heavily investment in Fixed Income Securities:
Most of people want to invest their amount in fixed deposit to get back it with interest. They do not understand the real rate of return. In fixed deposit, only 8 to 9 percent is return back from your saving. This will not grow your wealth insurance.
Always buys the newest and the best:
Some people are very eager to buy new things. They purchase items on high cost from market value and later cost reduces. That is why it is consider as common personal finance mistakes.
Expenses without budget:
Expenses are painful. Without any budget plan it can create a big issue to your common personal finance mistakes. Too many people spend their money when they don’t have strong condition. Even they never check their account balance.
Listen to others:
Often you take advice from your friends and family members. It’s good but if they know less or don’t have knowledge then you are wasting your time. Plus it would be a bad advice for you. Asking from friends or 3rd party person can become a common personal finance mistakes. Instead of asking from your friend you should take advice from finance expertise.
Spend more than you are earning:
Biggest problem of today’s generation is they want luxury life to live. Some of people don’t have enough money or earning. Then there is no doubt; they borrow money from other to live comfortably. In future they are not able to return it back.
Using credit or debit card for each and every purchase is a common personal finance mistakes. It’s good to have credit cards in emergency for paying big payments. But using it on daily needs is a foolish mistake. Do you know, it reduces your credit card balance which you never calculate.
Earning income only from one source:
Earnings from a single source can never fulfill your all necessaries so you must have any other income source.
Set financial goal:
There are some common question are arise in everyone’s mind that how much I get return? How much I should invest? Is it risk or not? These queries occur when you don’t have good financial condition. So for a better future, prepare your goals then do your investments.
Don’t invest for policies where you have to pay a huge amount as initial. It remains block for years and you are not able to use it in your other needs.