May 22, 2013 05:50 PM IST | Source:

How financial mistakes will come back to haunt you

Financial planning, as most would believe is not only just about planning for your retirement or investing wisely. If you actually crunch it to the core, financial planning is all about applying determined and disciplined guidelines to deal with our past, present and future finances. The past always haunts you.

Nitin Vyakaranam

Some of us are carrying the baggage of financial mistakes of the past which in turn are affecting our present and future commitments. Mistakes made in the past such as buying a wrong insurance or a few too many insurance policies, buying a home you couldn’t afford, buying too much on credit, borrowing from the place not suitable to you, trying to make quick money by investing without adequate research resources and knowledge. Though everyone wants to drop the baggage of all such mistakes, it is hard to get rid of.

Dreams seldom materialize on their own. You need to act now in the present and make a plan to head towards a financially stable and safe future. Most of us even fail to realize our past financial mistakes. A financial planner can help us in correcting our past financial mistakes. Following are the steps in order to correct past financial mistakes:

  • Learn to accept past financial mistakes and take decisions to mitigate them. You are the in charge of your future.
  • Maintain due diligence on the financial products you invest in irrespective of the person/institution recommending it. Make a decision based on what they are selling rather than who is selling.
  • Not only plan for unexpected events in life, plan for unexpected expenses as well.
  • Don’t put all the eggs in the same basket. Similarly don’t put the good eggs in a bad basket.
  • Set specific targets of what you want to achieve and when you want to achieve.
  • Monitor and re-evaluate your financials periodically.

It is important to realize that we not only need money to harness money but we need to revisit the decisions that led us to the road to nowhere. We have to plan our financials in a systematic way to get rid of the baggage of past financial mistakes and channelize our savings towards achieving our goals in a more disciplined and scientific manner.

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