Creditvidya.com | Updated On: April 11, 2015 14:11 (IST) | NDTV Profit
If you take a quick look at your finances, it may seem like everything is in order. From a distance, your finances may appear to be devoid of any discrepancies: You have a steady income and manage to pay off your mortgage/credit card bills on time and also have that extra bit to splurge on each month. However, a closer look may reveal that you are actually making several money mistakes that may lead to disastrous consequences in the days to come.
Let’s take a look at some of these mistakes:
1) Treating home loan as just another ‘to do’ item
If you have taken a home loan, just paying EMIs on time isn’t enough. You must keep an eye on the interest rate cycles and ensure that you are in touch with your lender on a regular basis. Putting your home loan on a backburner may mean that you are missing out on big monthly savings.
2) Putting away the task of checking credit score
Most of us are guilty of some procrastination, but this is one habit that may cost you dearly. Do not wait to check and improve your Cibil score only when you are planning to apply for a crucial loan. Keeping a tab on your Cibil report from time to time to see that your financial health is in order is a good practice.
3) ‘Retirement savings can wait’
When you are young and have good prospects in your career, you may have a feeling that it is too early for you to start planning your retirement. This is, however, a crucial mistake because you are ignoring the benefits of compounding and also missing out on having the safety net of your own contributions. The later you start saving for your retirement the costlier it gets for you.
4) ‘Medical insurance is a waste’
You may be in perfect health now, but there is no saying when calamity strikes. That is exactly the reason why you need to invest in a good health plan. In case a medical emergency occurs, you may end up wiping off all your savings at one go.
5) No savings for a rainy day
When the going is good, people think that they can put away their savings for a later day. But what if there are unforeseen events in the future like a job loss or a large, unexpected expense? If you do not have a pool of savings to dip into at such times, you may end up making huge expenses on account of emergencies on your credit card. This may inflate your debt burden into an unmanageable size in the future. Making sure that you have put away at least three to six months of your monthly expenses as savings all the time is a healthy practice.
Maintaining a good financial health is as important as physical health. By keeping these five points in mind, you can ensure that your financial health is in order.
Disclaimer: All information in this article has been provided by Creditvidya.com and NDTV Profit is not responsible for the accuracy and completeness of the same.
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