Common Mistakes In Financial Planning

mistakes in financial planning
Image source: HBI Tax

Where am I going wrong in my financial planning? What if I am committing any mistake in financial planning? What are the ordinary mistakes in financial planning that I should avoid? If these are the questions you have in your mind related to financial planning, then worry not. We are here with a list of common mistakes in financial planning that you should avoid doing. Let’s see.

mistakes in financial planning
Image source: HBI Tax

Not making and following a budget

When it comes about mistakes people make in financial planning. So, this is one of the top common mistakes. People don’t create a budget and even, if they do, they don’t follow it. Though it doesn’t look like this habit can actually lead you to greater financial losses. If you don’t keep track of your expenses how will you know about your financial situation?

Imagine an educational institution without any time-table. Everything will mess up. Right? Similar is the case with the budget.

Not Actually Planning

Just creating some unclear plans without linking them to your financial situation and your priorities isn’t going to benefit you in any way. Further, it is necessary to set realistic goals that you can actually achieve. So, you need to ask yourself that Is it actually possible?

Asking yourself questions about your planning will not just take you to a clear view but also keep you ready for any circumstances to achieve financial success.

Procrastination On Saving

I will start saving once I will turn 30. I don’t have sufficient wealth today to save. This isn’t an age of saving, my age people do chill so I will too. If these are your thoughts on saving then, you are doing a huge mistake in terms of financial planning.

Saving isn’t any milestone that will occur on its own. Saving is a habit that you have to build by yourself. You don’t need to save a huge part of your income. But, just save a goal like maybe 5% of your income. It isn’t a big amount, right? But the benefits it will give you are big. Summarizing this point, you should save. Even if it’s a little amount then also you should save. Afterwards, you can increase the amount whenever you feel the need.

Buying on EMI’s

“Buying your dream car on instalments.”  Though it can sound good yet, it is not good in actuality. If you can afford the payments it doesn’t mean that you can afford that product too. Even if you buy a big car over a huge interest rate just for showing off. Is that car actually going to benefit you in any terms? Yes, it can ensure a tremendous financial loss for you.

So, think before you buy.

In conclusion, the common mistakes are not making a budget, not setting your financial goals, not saving money and buying on instalments. These all are the common mistakes that most people end up doing. But, if you consider avoiding it, you can actually save yourself from a financial loss.

Thanks for reading. Hope you found this article useful.

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