5 financial blunder people generally do in their 30s
The moment you start earning is the moment you become independent financially. At this point of your career, all you want to do is spend your money on parties, fun, trips, holidays etc. For some extent it is good also because that’s your money and you deserve it. But earning and spending don’t go in the same way forever. People generally don’t even think about money planning in their 30s. Taking Investment, savings, insurance policy casually is what people do when they are early earners. So, what happens in the end is these people feel short of money or sometimes run out of no money. The point is they didn’t plan it for the future or the retirement.
Here are 5 common financial mistakes usually done by people at the age of 30s :
1. Burden of excessive loans
As far as loans are concerned always try to avoid it. Loans may be helpful when you are in emergency or you have no other source to generate the money. But records have shown that people with loans take excessive mental stress that is injurious to their health. Besides, if you have got poor loan record then you have to compromise with your credit score. And unpaid loans degrade your credit score.
2. Sticking with the traditional finance methods
Financial system has gone too far from its traditional way of functioning. Results shows that online methods are much better than offline methods in every aspect, be it efficiency, pace, security and charges. This is the time for online insurance plans are mutual funds so you don’t have to pay the commission to your agent. With the advancement in the e commerce sector, internet has come up with mobile /e- wallet which your online wallet is allowing to take the advantage of online shopping. This makes the billing and purchasing much easier. Talking about traditional or manual insurance policies, it is time taking and quite expensive.
3. Underestimating inflation
If you are thinking that inflation has nothing to do with your future planning then you are mistaken. Inflation will affect your entire budget plans you made for your future. Things are certainly going to get much expensive in future that means you won’t be able to purchase more in the same amount of money instead you are going to get less in the same amount . In order to cope up with inflation factor, proper investment plans should be made. You simply don’t want your retirement to be effected by inflation.
4. Saying yes to Savings and No to investment
People have this misconception that putting money in a savings account with 4 per cent return is going to help them in retirement. But the fact says that this could be their costliest attempt of the saving. There is a reason for that, with such less return there is no way they are going to survive the inflation in the future. People often ignore investing money but this is the best way they can secure their money with much better returns. Investment in equities is always the win win situation for the investor. This generates the return of 17 % and facilitates you with financial flexibility like tax deduction, transparency and liquidity.
5. Poor investment
Investment needs lot of research, patience and thinking. If you don’t have these attributes you end up losing a big share of money. It often happens when there is a discrepancy between the price and information told by the agent and the same information told by the actual source. Little mistake can cost you lakhs and crores and that moment you will have no one to blame except yourself. So better be investigative and clever while investing your hard earned money.