Are You Lazy About Your Money? – Mistakes People Make

It is not always that lack of knowledge is a factor for not taking care of money properly. Most people are lazy about how they handle money. We will touch upon some money mistakes people make, whether they are rich or not.

  1. Keeping large amounts in savings accounts, which earn less than 4% p.a. This is more visible in people who have substantial bank balances and still leave them unattended in their savings bank account. To give you an example, people who have on an average more than Rs. 1 lakh rupees kept in savings account end up losing about Rs. 5,000/- per annum. The solution to this is to decide what the liquid money requirement for one month would be and move the rest automatically into fixed deposits. Most banks offer this service and it requires a one-time instruction to the Banker.
  2. Not renewing fixed deposits on time, this leads to loss of interest income. This also applies to non-renewal of systematic investment plans in mutual funds, even if the idea is to continue to stay invested. Here one can correct this by issuing automatic renewal instructions to the bank once the deposit period expires. Also keeping close track of each of the financial deposits and reviewing them every month for renewal timeframe, etc. helps substantially bring this down.
  3. Losing share certificates, dividend warrants, etc. Not organising documents, share certificates, etc. which leads to people missing out on dividend income or even forgetting that they have some valuable investments made years back. Keeping a complete list of all financial instruments at one place, itself can prevent these losses. Also, over a period of time the value of some investments made can increase so substantially that, an investor’s loss can be substantial. One should also dematerialise all the shares & bonds and give ECS mandate to the company.
  4. Not paying bills on time, primarily credit card bills, telephone bills, etc. This leads to significant cost, given high late fee charges, etc. Doing an ECS (Electronic Clearing Services), etc. is a good way of saving time & money.

All these gaps are not explained by lack of knowledge but more by lack of simple personal discipline. Hence these mistakes are made irrespective of income levels or financial literacy.

Each of these may appear as having small financial cost, but they get compounded as income increases and can matter a lot if one looks on a cumulative basis.

You may also like to read:
Common Mistakes While Doing Risk Mitigation in Personal Finance
Can You Handle Money When it is in Your Pocket?
Common Bad Attitudes Towards Personal Finance

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