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This Dussehra, discard these 10 unwise financial habits

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The broader message from Dussehra remains is: the victory of positive over negative tendencies. Applied to finance and investments, the ten heads of Ravana can be a symbol of unwise and negative tendencies, which an investor must triumph over on Dussehra.

This Dussehra, discard these 10 unwise financial habits
Celebrated to mark the victory of Lord Rama over ten-headed Demon King Ravana, the Hindu festival of Dussehra represents the victory of good over evil. The broader message from Dussehra remains is: the victory of positive over negative tendencies.
Applied to finance and investments, the ten heads of Ravana can be a symbol of unwise and negative tendencies, which an investor must triumph over on Dussehra. It will ensure not just a win over negative, but in the long run, lead to Ram Rajya or financial security for an investor.
it would be a wise idea to look at 10 financial habits which one should end this Dussehra. Though financial behavior does not change instantly but keeping these points in consciousness will go a long way for a solid financial future.
Here are the 10 financial habits one should try to discard and overcome in Dussehra:
Overspending
Spending more than needed, especially impulsive buying or shopping is one of the worst financial habits and impacts planned expenditure or budget. Anil Pinapala, CEO & Co-Founder of Vivifi India Finance says one should stick to a budget.
“This could be weekly, monthly or yearly, but one could begin with a short-term budget plan and then get into the habit,” Pinapala told CNBC-TV18.com.
Delaying payments
Deferring saving plans and investments or EMIs to a later date is a sure way to spoil one's credit score as well as risking overall financial health.
Not investing at all
Not investing owing to a fear of losing one's hard-earned money or a lack of knowledge, is a financial habit to kill. The money won't grow lying in the bank; it will only grow when it is invested right, said Vivifi India Finance's Pinapala.
Investing without research
Investments are the key to a sound, secure and stable financial future. But, losing money to wrong investment decisions is a big risk. Pinapala says that one should do a lot of research, gather adequate knowledge, speak to experts, and then invest in plans that best suit them — real estate, mutual funds, fixed or recurring deposits.
Bonus backed inflation
During the festive periods, some companies tend to be generous with their key employees in form of special bonuses and other benefits. It is easy at this time to get carried away in the feeling and start spending beyond one’s means hence leading to a larger debt trap.
“This must be avoided,” said Raghuvir Gakhar, CEO at PC Financial Services Pvt Ltd. “ Suppose, Mr X gets a bonus of say Rs 50,000 resulting in which he ends up getting that new laptop he really wanted (unplanned spending) for Rs 1,20,000 then he is not up by Rs 50,000 but down by Rs 70,000,” Gakhar pointed out.
Zero savings period
Many people come out of the holiday season having completely exhausted their earnings for the period.
Considering that the holiday season repeats each year that basically ensures that for a significant period of earning life, individuals will be doing zero savings and investment. That is a problem that will clearly come to bite much later but it will bite nonetheless, Gakhar said.
Not doing tax planning
One should ensure that tax planning is aligned with the long-term financial goals. According to experts, one should look for avenues that serve the dual purpose of wealth creation and tax saving. Again not planning on tax-saving investments means ruining the financial health.
Not reviewing financial situations regularly
According to experts, one should cultivate a habit of reviewing finances once every six months. This includes tracking the performance of investments as a whole. This will keep investors in control and allow them to make changes like increasing the investment amount, redeeming certain investments, portfolio rebalancing, etc with ease.
Not reviewing the financial situation means debt levels are not in check.
Not creating an emergency fund
Life is unpredictable. Hence, financial preparation can help one in avoiding any sudden jolts to finances. Based on average monthly expenses (living costs), everybody should have an emergency fund that can allow them to survive without income for at least six months.
Not doing this means, running into a problem.
Taking loans for consumption
Loans are meant to fund a big-ticket expense. However, with the increasing circulation of money, loans are these days available for every other purchase. So, one should avoid taking it for any impulsive buying.
Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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