How many times have we taken an insurance policy because our uncle was the agent. Or how many times have we signed on a document without reading it fully just because the one taking our signatures was a close person. But sometimes sooner or later, we had to pay some price for our stupid financial decisions. This post is all about admitting our financial disasters and learning from them. I want all of us to start this 2017 by consciously agreeing to the wrong we did in the previous year and moving forward with a lesson learnt. Let’s begin with myself – Me despite being a Financial Planner myself, have done a couple of financial mistakes. The worst one being not saving during the initial years of my career. I didn’t start with a great six figure salary, it was nominal. Still, I could have saved with whatever I was earning, but I was so much into spending what I thought was mine with nobody to question me. And Yes, I proudly admit being a spendthrift to the level that I bought a Car with my first Bonus money. It was not needed, was a depreciating asset, and even if I wanted one I had a choice to buy pre-used car. But No, I wanted to spend what I had earned. My stupid without thinking spending stopped only when I saw my husband saving, and appreciating himself on his savings. And yes, then I did all the mathematics for my retirement needs, and after knowing the amount I need to save for my healthy retirement, I at least started saving that much.
Even our extravagant shopping comes under the Category of Mismanaged Money/Finance. With the advent of Online Shopping, everybody has turned into one shopaholic. We are buying things we don’t need or probably won’t use ever. Just because shopping has become so convenient, we feel that urge to buy at every occasion. So, our budgeting skills have already gone for a toss. As per PwC’s report by CII, headed as ‘e-commerce in India – A Game Changer for the Economy’, number of online shoppers will grow to 220 million by the year 2020 from 140 million in 2018, all due to ease of buying and our changing shopping habits.
As per S&P survey on financial literacy, over 76% Indians lack understanding in key financial concepts. Financial Literacy means that people have the knowledge to understand key finance concepts like inflation, risk diversification, compound interest, and numeracy. Anyone who knew 3 out of these 4 concepts was termed as Financially Literate. It is hard to admit that 76% of us were not aware of fundamental financial concepts.
It is my sincere request to all of you who gets some time to read this, please share your financial mistakes so that all can learn about the possibilities of the mistakes when it comes to Personal Finance. And we can all save each other in a Country where there are no Health and Retirement Benefits available to majority of us. Only our Financial Prudence will enable us to live happily without worries of future.
Charu Hastir, CFPCM is founder of http://www.theriteplan.com/. Rite plan is an online financial planning portal created to achieve a single objective of providing easy and Do It Yourself Financial Planning to netizens. Rite Plan is wholly owned by Tikkun Olam Financial Planning Services LLP. Please visit: https://theriteplan.com/index.php?route=common/home/