7 Common money mistakes you must avoid

Nirmal RewariaFinPeaceEvery dream comes with a fulfilment cost. In order to fulfil these dreams a person works diligently like an ox. He puts in all his energy to save money. He keeps himself focused on the goal and saves as much as possible. But somewhere along the way dreams change and so do the savings pattern. The problem occurs when after a year or two when we sit down and calculate as to what we have earned. We find that we have earned a lot but have spent an equal amount along the way. And when it comes to savings, the answer we get is zero or nil. All our personal savings dry up because of some common mistakes we commit.Immediate decision making: Financial decisions require deliberation. Impulsive decisions that are made without giving them a thought only amount to losses. If you come across an investment scheme do not immediately sign up for it. Gather all the information, take opinion of an experts, understand the nature of the product and risk involved, compare it with other products and go ahead with it when you are absolutely sure about it.Greed: Every investment takes time to mature and roll out returns. Also refrain from investing in schemes which offer too high returns. Do not become greedy because you may end up losing your money.Careless spending: Young people believe in living in the present and not in the future. They spend carelessly like on gadgets, electronic items, automobiles, clothes and other things. Spending on necessities can be controlled but there is no cap on spending on luxuries as there is no end to one’s comfort and wishes.Do not diversify investments: One mistake that is deadliest of all is unvarying or non-diversification of investments. Prudent investment portfolio is one where there is diversification.Inconsistency: Inconsistent investment shall take you nowhere. Take SIP route which makes you disciplined and helps you to invest every month consistently.Buy products from close ones: If you want to make sound investments then refrain from buying them from close ones. Relatives or close ones need not necessarily be professionals. In many cases, you find it embarrassing to ask more information about the product. You buy something that earn them a proper margin even if they won’t earn you much profit. Loans to friends: This is a mistake that almost every person commits at least once. In friendship you loan extra amount you have to your friends without any payback commitments. One should strictly refrain from giving loans to friends because it seldom comes back.Save your money and do not make the mistakes mentioned above.