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Ignorance may be a virtue in certain circumstances but certainly not when it comes to money matters. Procrastination and lethargy emanating from ignorance of financial priorities can really hurt your pockets deep, thereby damaging your dream of stitching deep pockets.
Following are the common transactions when ignorance translates into sizeable financial losses over time:
Utility Bills: One of the most common outcomes of forgetfulness, failure to paying utility bills on time –electricity, internet, telephone and the like – invite needless bleed in the form of penalty charges for late payment. Over time, this dreadful habit has the potential to wipe out substantial money, more than you can imagine.
Insurance Premium: Failure to pay insurance premium amount within the grace period means you may have to pay much higher to restore the policy since most companies charge revival charges alongside the premium amount. These revival charges can either be a fee of Rs. 500 or 0.75% per month interest on the outstanding amount. A needless drain by all means…
Credit Card Dues: This is by far the biggest blunder emanating from ignorance. Default on this front means you need to cough out late payment charges plus two to three percent interest on the outstanding amount. Worse, the late payment could disallow a credit card holder the invaluable interest-free cycle benefit besides hurting the credit profile.
Loan EMIs - Any EMI - be it on housing loan, consumer loan or personal loan - is a decisive factor in ensuring a person’s credit score. Failing to pay EMIs on time, more than inviting late payment penalties, can badly disrupt one’s credit score, which diminishes the eligibility of securing future loans.
Petty Expenses - Lingering payments of regular vendors - milkmen, newspaper guys, house maids, grocers can tarnish one’s image in society and bring disrepute from the conflicts of day-to-day interactions with accidental lenders. Over time, these pending liabilities can pile up into a huge amount which in turn has the capacity to disrupt one’s financial stability.