Most of the people think it is about a change in incomes. In reality, it is about our attitude, saving and spending habits. Even though we have more money in our account and in pockets, we keep complaining and blaming. Here, I am going to talk about some of the financial mistakes Indians make that are actually destroying their financial lives.
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This is first among a few other financial mistakes Indians make. Be it a marriage, party function, or routine life; Indians never leave a chance of showing-off. Regardless of our paying capacity, we spend money like idiots on expensive brands, jewelry, dine-outs, marriages, and so on.
Most of us want to copy the lifestyle of others. To make that happen, we either buy things on loan or we overspend. While doing that, we are least concerned about our financial future. I am not against spending money on buying some styles, but making it a habit without considering your financial worth, is the real problem.
Mobile selling dudes are the busiest people on the planet. In India, I don’t get why people are so crazy about these toys? We tend to spend a lot on the latest gadgets. The moment a new model of the phone comes on the market, most of the Indians will break their savings to buy it.
We are least bothered about checking other cheap options available in the market that can offer us the same quality but at a reasonable price. I know, many of you going to say that there is no comparison between an iPhone and an India made phone, but can you spot one single difference between the main purpose of a phone i.e. calling?
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Supermarkets are becoming a trend these days. I have seen people buying everything from undergarments to a LED from a supermarket. I can bet most of us had never realized this that they are overspending in these supermarkets.
Like other people, Indians get mad too when they see a sale, discount, buy-one and save a certain percentage on your second purchase or combo pack offers. Regardless of their need, they think, grabbing these offers are going to save them a lot. In reality, you are paying for things that you can buy anytime.
When you buy those offers considering discounts, you actually pay more. You are actually offered the slightest portion of the margin.
We live in a bubble that we are saving. But in reality, we are promoting consumerism. Observe closely and you will notice that companies launch these kinds of schemes with three objectives in mind – a stock-clearance, a change in product price or a new product in the pipeline at a reduced price?
Indian people believe that having a house is a must and to make this dream come true, they barely hesitate from taking a loan. For buying a house, if you are signing up a hefty loan document, then you are actually digging your own grave.
It is not that you should not buy a house on loan. But, before surrendering your financial peace, you need to check your financial future. What is the fun of having a house on loan, if your 85% salary is going on the loan? Many people opt for long-term loan repayment methods. But, in that case, you are made to pay a larger amount of interest. So, what is fun?.
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This is next on my list of financial mistakes Indian make. Indians love LIC schemes. Perhaps, this is not recommended scheme suggested by every parent right from the day one of their salaries.
According to financial planners, getting rich through these schemes is a dream. These schemes are going to make no difference to your life.
They leave you under-insured
Suppose Mr. A. bought a million rupee policy at the age of 30 and paying a good amount of money as a premium. Unfortunately, he dies at 35 with all his liabilities pending. After paying all his liabilities, how long do you think his family can survive on that one million.
Return on investment is way too low
In comparison to other saving methods like PF or tax saving mutual fund, LIC schemes offer a comparatively lower price. Why would you invest money in a scheme for a long period, when you have other high returning options available.
Losses on premature withdrawal
Hope you know, if you are withdrawing your policy five years before maturity, the deduction that you had availed in the previous year under Section 80 C is going to be void and will be treated as your income, hence, an additional income tax.
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Be it any serious matter, we Indians want to have the best advice, but for free. This is the reason, most of us suffer.
Why would an expert offer you a pragmatic and workable advice for free and that too in serious matters like money? If you need a perfect solution for all the financial mistakes you might be making, please hire an expert. I don’t see any trouble in paying a few buck to someone who can guide me how to secure my financial future.
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