5 Mistakes You Might be Making With your Finances

 Are you familiar with the wise person who once said that money is not the secret to an individual's happiness? Despite that, you cannot deny the role financial planning can play in your life. Moreover, if you have just started earning, it is necessary to plan your financial activities from that moment. The experts of Planswell often guide their clients with the right measures. However, you also need to know the most common mistakes you might make accidentally. So, let's dedicate this blog to learning about the same, shall we?




No Financial Planning 

Thinking that you have enough time is one of the common mistakes people make with major decisions. The mistake and impact are the same in financial matters, as many young adults think they have enough time to plan. And then, all they do is SPLURGE! You must divide your income in a 5:3:2 ratio, spend 50 percent of it on essentials, 30 percent on your entertainment, and the remaining 20% on savings. 


See investment and insurance as the same!

The concept of investment aims to increase your wealth, while insurance focuses on safeguarding yourself from risk. Both concepts are necessary but not the same, which you need to understand. At the same time, it is not wise to skip any of these assets. When planning insurance, its applicability and coverage are important aspects you need to consider. 


Imitate how other people live

Your friend's and colleague's luxurious lifestyles can be intimidating, but you don't need to imitate them. Instead, before making a big spend, ask yourself if you actually need it. You should also identify whether you are purchasing it out of your fear of missing out or your needs. Most importantly, can you actually afford to buy that, or are you looking to splurge? 


Skipping the step of saving

You might question the need to save a portion of your income by thinking, do you actually need it or not? Well, emergencies can occur anytime! Your cell phone might slip from your hand, and you accidentally break its screen. Or, some unseen medical issue might occur! You cannot predict, but planning right can still be your smart move. 


Ignoring the pile of your credit card!

Remember the dialogue from Spiderman about the great responsibility that comes with great power? Apply that in the case of a credit card by avoiding harm to your credit score and not allowing the debt to gather up altogether. If you use it wisely, your credit card can pave the way for many finance-related solutions. It can include creating a credit report and many others. 



Securing the bottom line!


The role of financial planning is something you cannot deny. Despite the big bucks you make, improperly managed finances can ruin several things for you. The experts from Planswell suggest embarking on your financial planning when you realize it. And, if you need assistance from professionals, do not hesitate to ask for it. 


Also Read: Financial Planning and Life Planning: What to Know?

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