Its undeniable fact that blind spots in "Finances" can work against us by destroying our efforts to upgrade our financial health. We have been neglecting some of the aspects in our financial lives which can yield many financial rewards and otherwise. There should be some of the common financial blind spots and there is a high probability that one must have few of them. Therefore, we have listed some blind spots that needed to be avoided in financial crunch.
Minimal Savings: The proportion of savings varies from person to person as it depends upon your income and amount based on specific situation. Some of the people can’t calculate how much they require saving. Also, there are some signs which indicate that you are not saving enough money such as no idea of your expenditure, not paying credit card bills in full, zero saving goals, lack of emergency funds and living salary to salary.
So, it’s better to calculate how much you need to save and for how long and initiate a process of setting aside some amount each month.
Thought of easy investment in future: Most of us think to save and invest more in future without realizing the importance of present day. We live with the mindset of I will save when I get a hike in salary, when I get a promotion or when I get married etc. as life is unpredictable, nobody knows the set of challenges that will come tomorrow, so it’s not easy to push your goals to future.
One must start investing or saving today, no matter what the amount should be. The thing that matters is your goals for present day and stop assuming that it would be easier in the future.
Buying costly investment plans: The plans with highest commissions are the worst financial products. Never go for the products that are pushed by the salesman to you as best products are not meant to be pushed by anyone. Moreover, doing best with our investments usually harm us. It tends us to buy more complex products where we are likely to lose money over the long term. Always buy a simple investment product that is suitable to you.
Unprepared emergency funds: The biggest mistake that one can do is not to prepare any emergency funds with a thinking of something unexpected will not come up. Most of the people don’t plan their expenses for medical emergencies, wedding presents and property taxes. These expenses are not a part of one’s monthly budget so we forgot to allocate cash for that.
So be prepared with these irregular expenses in the future and save regularly for such situations.
Too much risk: Some of the people who have saved less for their retirement desperately need high returns and may be tempted to take more equity risks. If you take such risks and stock market crashes during that period then you would be unable to even meet your basic needs. Therefore, if you don’t have enough financial cushions then you should not take less risk.
At the end, one must be aware of such blind spots in their finances and be optimistic to figure out their financial health.
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