The earlier generation was excellent when it came to savings. Their investment decisions were not that commendable, though. They believed in saving in bank accounts, fixed-interest instruments or in gold. They were averse to taking risk. We are a generation of risk takers. But make no mistake, we commit more mistake than our parents. We live in the moment knowing too well that the key to financial security is in planning and proper execution. Every mistake made comes at a price. Financial mistakes come with a bigger price, though. The repercussions of money mistakes are huge. One wrong move can lead to shortfall of money for other necessary things. Sticking to the basics, we have compiled a list of 11 financial mistakes you must avoid in 2018:
1. Not having an emergency fund
Most of us make this mistake. We all talk about saving for the rainy day, but we rarely do. Imagine an emergency and the situation demands to shell out Rs. 50000 – faulty AC, broken car or home repair. It is a big amount for most Indians. When we don’t have this much money, we borrow at a premium. Why don’t we set up a fund to begin with? Start small. Let’s say 1000 rupees a month and invest it in a SIP. This fund would grow over the years and would be helpful in emergency situations. Two suggestions that work best to start an emergency fund:
- Automate deduction from the savings account and keep it small to ensure longevity
- Invest to let the money grow
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