Life is a game of choices. You have many
options before you, and you have to choose the most appropriate one. The decision you make can either be beneficial to
you or might prove tricky. The same logic applies to your financial matters.
You have to get your planning right. However, it is not always possible to do
that.
People tend to make mistakes, but the trick
to success in life lies in bouncing back from the mistakes and rectifying it. Some
of the errors can be elementary such as
sticking to a savings account when you have the higher-income generating
recurring deposits or the fixed deposit options before you. Similarly, many
people are averse to investing in SIPs and mutual funds that can generate better income than the bank fixed
deposits. Of course, we cannot alter your thinking, but we can indeed list out some of the financial mistakes
that can cost you dearly.
Budgeting – Don’t be Kidding, That is Not for Me
If you think budgeting is not for you, you
are making a huge financial mistake. Without a budget, you will never know
where your finances are heading. It is similar to driving on an unknown terrain
without a map in your hands. You go round in circles and end up nowhere.
Similarly, having a budget is vital. Now, the best aspect of it all is that
budgeting is an easy exercise. You have to balance out your income and
expenditure. It is evident that spending
more than what you earn will take you down a slippery slope. So, take a paper
and pen in hand and start listing out your expenditure and income. You have
mobile apps to do this job for you. Install one on your smartphone. It helps to
keep track of your expenses.
Smaller the Home Loan EMI, the Better it is
In the immediate future, you are right. A
smaller EMI (Equated Monthly Instalments) entails that you pay less. Hence, you
have a higher disposable income with you. However, this decision can backfire
in the long run. Consider this example. Ram has a Home Loan of Rs. 30 Lakhs repayable in 30 years @
9%. His EMI works out to Rs. 24,139. He pays a total interest of around Rs. 57 Lakhs over the entire 30-year
period. Shyam has a similar loan but with repayment
tenure of 20 years. His EMI is Rs. 26,922 with a total interest outlay of about
Rs. 35 Lakhs over the 20-year
period. Notice that the difference in the monthly instalment is about Rs. 2,800. However, the interest outlay variation
is a whopping Rs. 22 Lakhs. You decide who benefits more. We
leave it to you. Therefore, opting for a shorter tenure is beneficial in the
long run especially if you can pay the difference in the EMIs comfortably.
All Insurance Policies are the Same
No, they are not. The policy that suits your
friend need not necessarily suit you. There are various insurance products in
the market. Go through them and decide on the one that suits your lifestyle the
best. Consult an insurance expert before deciding to purchase the policy.
Insurance agents love to sell policies that benefit their interests. You can
take your time to decide by consulting
others.
Many people opine that purchasing insurance
is a tax-saving measure. They are right in a way. However, you should not look
at insurance entirely as a tax-saving
instrument. They can benefit you in many other ways.
Investing in Real Estate is the Ultimate
People have a
general opinion that land is one asset that does not depreciate. Hence,
investing in real estate is the ultimate investment of all. It is right to a certain extent, but real estate
investments are not liquid enough. You might not be able to realise the actual
value of the investment in an emergency. Secondly, investing too much in real
estate can make you victims of the real estate scams and land disputes. You
might even lose your entire asset within no time. Therefore, follow the golden
rule of investment, “Never put all your eggs in a single basket.” Diversify
your investment over a range of different assets.
Credit Cards are There to Freak Out
Credit Cards are excellent friends as they
help you out in financial emergencies. At the same time, they can prove to be
the worst enemies because of the high interest
rates they charge. It is of course if you
default on the payments. Therefore, the key is to use the Credit Cards
intelligently. Ensure that you pay the Credit Card bills on time. Your
budgeting exercise can come in handy
here. You end up improving your credit score in the bargain. A good credit
score helps you in securing Personal Loans Online Approvals.
It is very
easy to pick up the wrong financial habits. Steer clear of them. It
ensures that you lead a comfortable life. You end up with a good credit score
thereby making you eligible to get an unsecured Personal Loan at any
time.
To apply online for Credit Cards, Secured Loans and Unsecured
Loans, visit www.mymoneymantra.com, the leading online lending
marketplace that offers financial products from 70+ Banks and NBFCs. We have
served 2 million+ happy customers since 1989.
Talk to our Loan Specialists toll-free at 1800 103 4004 to
know more about our products and offers.
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