මිනිසුන් කරන නරකම මූල්‍ය වැරදි 10 ක් | OnCredit ශ්‍රි ලංකා

Top 10 Worst Financial Habits/Mistakes People Make | OnCredit Sri Lanka

Many of us are very well aware that we practice bad financial habits on a daily basis. It’s not our fault! Our education systems rarely include practical life skills, such as personal finance management. We usually enter adulthood barely clinging on to whatever we have been taught by and picked up from our parents’ personal financial literacy - which might not always be the best advice. By the time we begin our careers, we squander away our money only to realise the harsh truth many years down the line, usually after we’ve made a few big mistakes along the way.

Here are the top 10 worst financial habits and mistakes people make.

1. Poor Spending Habits

Poor Spending Habits

No matter how much money you make, if you have poor spending habits you will never be able to make the best use of your income. Spending money on frivolous things adds up one by one. Your thrice-a-week Rs. 600 work lunch from the next-door posh cafe will end up at an absurd Rs. 93,600 per year. When you have money, this might not seem like much but if you ever find yourself struggling to make ends meet, the regret of past purchases will be almost unbearable. Reigning in your poor spending habits will help you live a more responsible life, no matter what your income might be.

2. Not Saving for Retirement

“A bird in hand is worth two in the bush” is an apt analogy when you look at savings. A man who has Rs.20,000 in his savings is better off than a man who earns and spends one million rupees every month when both lose their income - which is what retirement is. Saving for retirement is the most crucial part of your entire career. Any investments should be made only after you have saved a sufficient amount to tide you over in the most fruitful years of your life.

3. No Emergency Fund

Apart from your savings, you should also build up an emergency fund. This is your secret stash which you are allowed to dip into whenever things get tough or when faced with unexpected expenses, like medical emergencies or urgent household repairs. Too many people go into debt and have to approach payday loan providers like OnCredit.lk in these types of situations. An emergency fund will allow you cover these unexpected, unavoidable expenses without needing to wipe out all or part of your savings.

4. Not Investing Your Money

Not Investing Your Money

The unfortunate reality is that money depreciates in value. Saving one lakh today might not be worth that much in the next fifty years. Further, no matter how much you earn or save, you can never become wealthy unless you invest your money. While many people view “investing” with a one-track mind, thinking of business ventures and stock markets, this is not the case. There are countless ways to invest your money at varying degrees of risk and return, such as investing in long-term assets like real estate, gold and other commodities.

5. Misusing Credit Cards

If used properly, credit cards can actually save you a lot of money by way of great deals as well as cashback schemes. But there is no denying that credit card debt is a huge problem around the world. Having so much money at your disposal with just the swipe of a card proves to be too great a temptation for many people who don’t think about just how they will manage to pay it back. One of the worst mistakes you can make is to not pay your credit card bill in full every month. If you want to use your credit card to fund a major purchase, look at interest-free instalment schemes.

6. Never-Ending Debt

Similar to credit cards, being in debt is very tricky to navigate and can end up being a hole that you keep digging deeper. While loans are nearly impossible to avoid in this day and age, even the most crucial personal loan can end up being your financial downfall if you hadn’t planned ahead and made the necessary arrangements to pay it back. Don’t simply pay off the minimum amount each month, but try and deplete the capital amount as well to ensure that you pay off your personal loans in the quickest possible time.

7. Borrowing Money Frequently

We all know a few people who seem to coast through extremely lavish lives purely on borrowed money. These people rely on credit cards, payday loans, a quick loan or two from a friend, to fund their fancy lifestyles. Their monthly earnings go towards repaying these loans, after which they promptly take out new loans for the rest of the month until their next paycheck. Borrowing money should be avoided at all costs unless it’s a matter of life and death, as it is a very slippery slope from one quick payday loan “just this once” all the way towards complete financial ruin.

8. Spending Too Much on Liabilities

Unless you own a vehicle business, a car can be considered a liability in Sri Lanka even though our public transport system is extremely poor. Even the coolest mobile phone isn’t worth the exorbitant price tags after tax. These kinds of purchase are liabilities because you can rarely hope to recover the money you spend on these items. Do not make the mistake of looking at liabilities as assets.

9. Not Having a Financial Plan

A financial plan is a must for any serious adult. No matter how much money you earn, if you don’t know how to manage it properly, it will all be wasted. A good financial plan covers income management, good spending habits, building retirement savings and emergency funds, as well as smart investments. If you don’t have a financial plan, it’s high time to start working on one.

10. Not Thinking About Your Credit Score

While debt is never a good idea, it is almost impossible to avoid unless you are extremely wealthy. For instance, you can never hope to own a house or a car by yourself unless you take out leases or personal loans. If you hadn’t thought about your credit score in advance, you may find yourself facing certain roadblocks when it’s time to take out your first loan. Think about your credit score the next time you consider the pros and cons of credit cards or small loans.