Be it taking that gym membership that has never been used or sharing your credit card PIN with a stranger, most of us have pushed our hard-earned money down the drain at one time or another. So it’s a must that you do break-free from these habits right away to stop straining your wallets.
1.Buying a House You Cant Afford: Investing in a property, which may impact your other goals,isn't a smart move. A house is an liquid asset, and if you have a transferable job, are not sure where you will settle and cannot invest for other goals, postpone this goal. What You Can Do Is: Experts advise not to spend more than 30% of your income on loan EMIs. If buying a house means not being able to save for retirement, then don’t buy it. 2.Buying Time-Share Plans: For one, you are unlikely to use the vacation time-share plans fully. You will need to fit into the fixed regime of pre-determined days at specific locations booked 5-6 months advance. Besides, lodging is free, you pay for everything else, including food. What You Can Do Is: With weekend holidaying big on trend and light on pocket, travel at will without the burden of high upfront EMIs for time-share plans. 3.Keeping up with the Joneses: If you want to keep pace with your wealthy neighbor or relative, your expenses may not be able to keep pace with your income. This will cut down on your surplus amount and investments, ultimately impacting your goals. What You Can Do Is: Compare incomes first, instead of new phones and cars your neighbor buys or the number of holiday they go on. Indulge in expensive binges only if you have some surplus left after investing. 4.Withdrawing EPF Corpus: If you withdraw the corpus before five years of continuous service, it is taxable. Since there are few savings people dedicate exclusively to retirement, it is advisable to allocate the EPF to this goal. What You Can Do Is: If you shift jobs, have the amount transferred to your new employer. For emergencies, maintain a contingency fund. As a rule, do not dip into EPF corpus. 5.Not Having Fun Money In Budget? You will constantly overshoot your budget if you don’t provide for fringe or infringement on entertainment expenses. Its human to want to spend on oneself and essential to stay motivated to save. What You Can Do Is: Designate a nominal amount for eating out or movies or just for fun shopping every month. 6.Not Spending on Career: Enrolling in a new course or acquiring a skill mid-career can enhance your income manifold. So taking some money out from your tight budget could pay in the long run. What You Can Do Is: Keep yourself updated with information related to your profession through online and offline courses or literature. You could even take a loan for studying if it means a significant rise in income later. 7.Sharing Your Password or PIN with Strangers: Fraudsters will gain access to your bank account or credit card and wipe out your savings or conduct online transactions in what is possibly the easiest way to loose money. What You Can Do Is: Never offer sensitive financial information regarding banking, insurance or taxation to anyone over email or phone. 8.Investing in Fixed Deposits: You get a lower rate of interest, the maturity amount is taxable and you have to add up the interest on deposit every year to your taxable income. It’s not exempt under section 80C unless it’s a tax-saving five-year deposit. What You Can Do Is: Invest in avenues offering better returns such as mutual funds or ELSS plans. Source: Economic Times
1.Buying a House You Cant Afford: Investing in a property, which may impact your other goals,isn't a smart move. A house is an liquid asset, and if you have a transferable job, are not sure where you will settle and cannot invest for other goals, postpone this goal. What You Can Do Is: Experts advise not to spend more than 30% of your income on loan EMIs. If buying a house means not being able to save for retirement, then don’t buy it. 2.Buying Time-Share Plans: For one, you are unlikely to use the vacation time-share plans fully. You will need to fit into the fixed regime of pre-determined days at specific locations booked 5-6 months advance. Besides, lodging is free, you pay for everything else, including food. What You Can Do Is: With weekend holidaying big on trend and light on pocket, travel at will without the burden of high upfront EMIs for time-share plans. 3.Keeping up with the Joneses: If you want to keep pace with your wealthy neighbor or relative, your expenses may not be able to keep pace with your income. This will cut down on your surplus amount and investments, ultimately impacting your goals. What You Can Do Is: Compare incomes first, instead of new phones and cars your neighbor buys or the number of holiday they go on. Indulge in expensive binges only if you have some surplus left after investing. 4.Withdrawing EPF Corpus: If you withdraw the corpus before five years of continuous service, it is taxable. Since there are few savings people dedicate exclusively to retirement, it is advisable to allocate the EPF to this goal. What You Can Do Is: If you shift jobs, have the amount transferred to your new employer. For emergencies, maintain a contingency fund. As a rule, do not dip into EPF corpus. 5.Not Having Fun Money In Budget? You will constantly overshoot your budget if you don’t provide for fringe or infringement on entertainment expenses. Its human to want to spend on oneself and essential to stay motivated to save. What You Can Do Is: Designate a nominal amount for eating out or movies or just for fun shopping every month. 6.Not Spending on Career: Enrolling in a new course or acquiring a skill mid-career can enhance your income manifold. So taking some money out from your tight budget could pay in the long run. What You Can Do Is: Keep yourself updated with information related to your profession through online and offline courses or literature. You could even take a loan for studying if it means a significant rise in income later. 7.Sharing Your Password or PIN with Strangers: Fraudsters will gain access to your bank account or credit card and wipe out your savings or conduct online transactions in what is possibly the easiest way to loose money. What You Can Do Is: Never offer sensitive financial information regarding banking, insurance or taxation to anyone over email or phone. 8.Investing in Fixed Deposits: You get a lower rate of interest, the maturity amount is taxable and you have to add up the interest on deposit every year to your taxable income. It’s not exempt under section 80C unless it’s a tax-saving five-year deposit. What You Can Do Is: Invest in avenues offering better returns such as mutual funds or ELSS plans. Source: Economic Times