Money Mistakes To Leave Behind

Money Mistakes To Leave Behind
Tanvi Goyal - 11 January 2020

Usually, newly wed couples hesitate to discuss money matters with each other. Even parents feel awkward to discuss money issues in front of their kids. Discussing positive money matters at home can be a blessing for the married life of a couple and also kids can learn to save and invest and get the knack of handling money from their parents.

Similarly many people feel they are bad at handling money and do not indulge in financial decision making. Many women feel that money matters are complex and more often they do not have women role models who have handled financial decisions, so they think that it is a male domain. These days there is ample information available if one seeks it. One should make up their mind and have the confidence to take charge of financial decision making at any cost. It is a vital life skill. Once they make up their minds, they should cast aside all fears and anxieties and work towards continuously increasing their financial acumen by reading books, attending workshops and taking online courses.
How do you decide the mode of transport without having any clue about the destination? Similarly, how does one decide which investment vehicle to take without knowing the purpose it is being bought? One should identify the financial goals in order to understand whether they are long term in nature or short term. This will help one in identifying the most suitable investments.
The joint family system in India is slowly giving way to nuclear families. In the Joint family system, people had each other's financial support in case of emergencies and even in case of loss of a family member. Now with nuclear families, the need for insurance is very high and many people are still unaware of the importance of the weight of insured life and remain uninsured or their insurance cover is inadequate.
Many people attempt to make risk free investments, looking for guaranteed returns and money-back options. However, when people invest in risk-free, their portfolios are not able to beat inflation in the long term. This has a grave effect on their life's investments as they realize that in their retirement the amount is smaller than they expected. Risk should not be avoided but it should be understood and taken in a calculated manner.
The author is Founder, Wealth Aware