It is that time of the year, when you make New Year resolutions to change certain bad habits and choose to start off with good ones, to improve your life. In 2018, you should all resolve to apply this to your personal finances and money matters as well.
Here are the top 5 money habits that can prove very costly in the long run, and you must give them up post haste:
1. Taking investment decisions based on money tips from friends and relatives
Many a time, we get influenced by their views and take their advice when it comes to personal money matters; we tend to rely on people who we know and trust.
However, it is very important to differentiate between a qualified financial advisor and a person who is giving advice based on his experience as an investor.
2. Lack of tax planning
Making provision for funds last minute usually leads to unnecessary stress and often leads to some amount of additional tax implication.
This can be avoided by planning all tax-related investments in advance, and in fact, investing in the same at the beginning of the year itself.
3. Making ad hoc investments
Simply setting aside some amount as savings is not enough. All investments must be made with a purpose in mind.
Take the help of a qualified financial advisor to list out your life goals and how to prioritise, plan (how much you need to save) and invest (where to invest) to achieve these goals.
Periodic reviews will also ensure that you stay on track towards achieving your goals.
4. Spending sporadically and not having a savings budget
We recommend a strategy of first setting aside a portion of your income as savings towards your goals, and then spending the balance amount guilt-free.
5. Being impatient and tracking portfolio returns too frequently
Like a great wine, the fruits of investments get only sweeter with time. Hence, make it a habit to ignore the short-term fluctuations in the market and stay focused for the long term.