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12 things that hurt you financially

February 21, 2015 15:43 IST

Check if you too are guilty of harming yourself financially

There are many things which hurt you financially. Obviously it is all the things that you do that matter but not KNOWING the following things make you behave in a particular manner. So NOT KNOWING THE FOLLOWING things is what is hurting you FINANCIALLY:

1. Not remembering that you too will retire: by the age of 35 if you have not started earmarking 'retirement' portfolio, you have lost the magic of compounding. Period.

2. Having an emergency fund, but not knowing what is an emergency: Dipping into your emergency fund for your car repair, a new TV, travel, etc. is so stupid, it is unbelievable and it is amazingly common too! I find it funny!

3. How much return you are getting on your OVERALL portfolio: If you do not know this, it means you do not know your risk profile, asset allocation, or you have money far in excess of your needs. Well, you could be 'To the Manor Born' but you will soon lose your assets.

4. How to protect your money from budget-busting friends. Or in hindsight, are you a budget-buster yourself?

5. As you get older your financial life will get far more complex and you will have a spouse who will tell you what to do with your money. Chances are that you will not be able to do what you wish.

6. How your parents handle money, how your wife and kids handle money, etc. will determine how much money you are able to save.

7. That savings are alone not enough. The amount accumulated as savings have to be put to work. This is called investing.

8. Investing carries lot of risk, but not understanding INVESTING is the biggest risk.

9. You do not understand your CTC, and there is no way you can reconcile from a CTC to your take home salary figure.

10. That one stupid career mistake -- like misbehaving with a woman -- can destroy you financially, as well as socially and professionally.

11. You live pay cheque to pay cheque and you will not have it otherwise.

12. Your house is full of impulse purchases. You have no clue that these purchases have set back your financial goals by a few years.

Illustration: Uttam Ghosh/

P V Subramanyam