Money mistakes are so common. It’s annoying, frustrating and guilt-tripping. A screw-up here, a slipup there… the best of us are not free from mistakes and consequences. Clichéd as it may sound, mistakes have one use – that we learn ‘valuable’ lessons from them. But if those blunders have anything to do with your hard-earned money, the ‘lesson’ comes at a price.
Let us talk about some common money matters and related mistakes to help you dodge the headache and monies.
Mistake 1: Early Home Loan Or Personal Loan Settlement
The minute you purchase a home, paying off your loan at the earliest becomes a primary concern for most homeowners. It is indeed the responsible thing to do, but you might end up losing money here. A lot of it in the form of prepayment penalties and other hidden charges. Same goes for personal loans, whether you have acquired them from traditional banks or alternative lenders. Instead of settling your home loan or personal loan early, you can use plenty of smarter strategies like investing in mutual funds, retirement plans etc.
Mistake 2: Falling in love
Before you jump down our throat, it is not love that is the problem. It is failing to communicate and compromise while accommodating each other’s tastes and wishes and ending up splurging. For instance, if one partner is a travel buff and the other is a foodie, prioritizing becomes a math game – to be played without jostling the apple cart.
Mistake 3: Not having the ‘money-talk’ before marriage
Discussing finances is not easy. Especially for soon-to-be-wed. You are scared of being judged. You’re not ready to reveal a lot of your individual routines and quirks to your partner so soon. It also feel like giving up your financial freedom, even if it isn’t so. But marriage links your financial future too. Different spending choices and investment plans may clash. It is better to have a basic understanding before you tie the knot.
Mistake 4: To assume that you will be richer
Job changes, promotions, hikes – it is not idiotic to expect to be richer in future. But your expenses too increase. Then there are problems like inflation, recession etc. it is during your 30s that you start to get a bit secure in your career. You’re experienced and more skilled now. You are in demand. But this sense of positive predictability is not guaranteed. Spending your future money or taking on debts by banking on future earnings can land you in a huge financial pothole.
Mistake 5: Not having a fun budget:
Fun and relaxation – is a basic need. Only, you need to identify and be aware of the fine line between fun and limitless spending. An occasional weekend trip, a movie once in a while, shopping, rock show, buying what you have always wanted – savings needn’t rattle these beads of joy.
Summing it up:
The world is complex and infinite. When it comes to finances, there is plenty of information and several experts out there. The trick is to know limits while focusing on your strong points. Get as much advice as you need. Read as much as you want. In the end, fruits of your financial decision is as much yours as the mistake is.