Give Wings to Your Financial Planning, Don’t Wait for 50s

Mistakes are a part of our life. It can be social or financial. Most mistakes are made when we are young. Some are so grave that they leave a feeling of regret throughout our life. Social mistakes can be overcome with the help of support from the family but the financial mistakes have to be overcome by the one who commits them. 

Improper handling of money can prove dearer when people grow older and are on their way to becoming senior citizens. In order to avoid such regret, it is advisable to inculcate a habit of regular saving at an early age to enjoy smoother senior citizenship later in life.

So, give wings to your financial planning, don’t wait for the 50s to start thinking about saving and retirement. We have listed some of the financial mistakes one should avoid in their early life:

Use Credit Cards Wisely

The habit of not paying off credit card debts can be dangerous, use them wisely. Keep one thing in mind that credit card dues need to be cleared as quickly as possible, particularly before the free credit period ends. Credit card debt is even worse than exploiting your cash to stagnate in fixed deposits (FDs). At a rate of interest of 33 per cent per annum and above (which in some cases are often revised upward if you’re late with repayments), credit debt is the surest way to bleeding cash.

Credit card debt can not only lead to high late fees but also affect your credit ratings. Untimely repayments and high credit card dues result in a downgrading of your credit rating and affect your future ability to take a higher loan.

Not to Invest in Equity Instruments 

The best time to start saving and investing is when you are young and start earning. If you think you don’t earn enough to invest then you are wrong. Start small with fixed recurring deposits and scale up as you earn more. Investing too late in life can put you and your family at a financial risk. Believe me, the earlier you start saving, the quicker you will reach your goals. Start investing in equities early on in your life. Equities give the best returns over the long term and help you bear inflation and make money. If you aren’t sure of equity stock investments, then start investing in mutual fund SIPs.

Say No to Ponzi Schemes

Greed drives many investors to invest in dubious schemes. Many fly-by-night companies operate Ponzi schemes that offer fantastic returns on your investment that can even sum up to 10-20 per cent per month. You would not see anything wrong happening with you until you get cheated and lose all your money. It’s better to avoid these get-rich-quick offers rather than regretting it in your 50’s.

Showing Off More than You Afford

Accept the fact that we cannot spend more than what we earn. However, many people nowadays believe in living a lifestyle they can’t afford in reality. That makes them spend credit card money on unnecessary things that they can’t even afford.

Learning to live below your means can really give you the power of financial freedom. This simply does not mean that you have no life today, but live a lifestyle you can afford, keeping your future in mind.

Spending All Your Money on Today

Avoid spending on luxury items like cars, gadgets, or holidays you can’t afford today. Start saving for your holiday or dream car and by the time you save up, you can decide whether you really need it. Do not commit a huge part of your salary into mortgage payments to buy luxury.

Start early, since age is on your side and you will reap the benefits early. Not only will you be able to meet your financial goals easily, but you will also have peace of mind at a later age.