Although financial management is considered a necessary skill, most people do not have sufficient financial literacy.
What are bad financial habits?
Lack of awareness regarding basic aspects such as the basics of saving and types of investments, there is a risk of spending without limits and getting into debt. Especially, in recent times, there is a situation where the debt burden of Indians is considered to be increasing. In this context, it is necessary to know and avoid financial habits that can lead to debt.
Digital transactions: Overuse of credit cards can definitely lead to debt. Swiping the card for daily use without any planning can cause harm. Similarly, attention should be paid to digital transactions.
Budget is important: When you spend more than your income, you will definitely get into debt. This is because you spend as you wish without a proper budget. Therefore, in addition to having a monthly budget, you should monitor where the money you spend is going.
Small expenses: Small expenses incurred daily may not go unnoticed. However, in the overall perspective, these expenses can have a significant impact. It is good to keep track of daily expenses in some way. This will also help in controlling expenses.
Financial Education: Just earning an income is not enough. You should know the basic aspects of financial activities including saving and investing. Inadequate financial education will lead to poor financial decisions. This will trap you in a debt trap in the long run.
Emergency Fund: In addition to borrowing for necessities, you may also have to borrow for unexpected needs. It is emphasized that an emergency fund is needed to deal with such unexpected crises. This type of fund is also an important aspect of planning.
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