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Financial Mistakes To Avoid For Every Decade

ByRebeccaShamasundari.26November2014.Cards,CreditCard,DebtManagement,Insurance,Investment,LifeInsurance,MoneyManagement,Retirementplanning,
WillWriting
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Everyoneofusmakemistakeswithmoney.Wedonotsaveenoughorwespendtoomuchonsomethingsilly.Sometimes,weselloursharestoo
soonortoolate.Itislikelythatwewouldstillbemakingmoneymistakeswellintoour60s.Herearethefinancialslipupstowatchoutforateach
decadeofyourlife.Avoidingthesefinancialmistakesasyougoalongcansaveyoualotofstressandmoney,bothnowandinotherstagesof
yourlife.

In your 20s

Inyour20s,youaremostprobablynewintheworkforce,tryingtoworkyourwayup.Unfortunatelythisalsotranslatestoalowincomebutbeing
young,socialisingusuallytakesprioritycausingyoutooverspendandundersave.

Overestimatingpurchasingability
Youcouldbewantingtotraveltheworldorbuyaluxurycar,butyoudonotearnenoughtoaffordthesethings.Ifyoucannotpayforthesewants
fromyourownpocket,youmayendupincurringhugedebtsthatholdyoubackforyears.Getusedtosavingforthethingsyouwantinsteadof
solelydependingoncredit.

Delayingretirementsavings
Whenyouareinyour20s,retirementcanseemfaraway.Theearlieryoustartstashingawaysavingsforthispurpose,themoreyouwillearn
withcompoundinginterestandthemorecomfortableyourretirementwillbe.Themoneyyousaveinyour20sispotentiallyworthwaymorethan
anythingyouwillsetasideinyour40s.

Abusingcreditcards
Whilecreditcardsserveavaluableservicebyprovidingconvenience,theycanalsotemptyouintolivingbeyondyourmeans.Atthisstage,your
creditcardbillscanseemburdensomeifyouarenotcareful.Failingtosettlethefullamount,youmayresorttopayingtheminimumbalanceonly,
incurringabigsackofaccumulatedinterest(Findouthowyoucanpayoffyourdebts).Createaspendingplanbasedonyourincomeandstickto
it.Usecreditcardsonlyifyoucanpaythebalanceoffinfullattheendofthemonth.

In your 30s

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Inyour30s,youaremostprobablymarried,andstartedtoplanforyourfamilywhichmayinvolvehavingkids.Moreandmorefinancial
responsibilitiesarepouringin,anditwilltakesomefinesseandstrategytobalanceyourfinancesandprovidethebestforyourfamily.

Notplanningforyourchildrensfutureeducationneeds
Holdingyourbundleofjoyinyourarms,thethoughtofhimorhergoingtotheuniversitymayseemlightyearsaway.But,timefliesfasterthan
youcouldeverimagine.Asthecostofauniversityeducationissettoriseasyearsrollby,youshouldstartplanningforyourchildsuniversityfund
rightfromthebirthofyourchild.Ifyouhavemorethanonechildtofundthroughuniversity,thesefigurescanrackupquitehigh(Findouthowyou
cansaveforyourchildrensfutureeducationneeds).Byprocrastinatingornothavinganeducationfundatall,youmaybeforcedtodipintoyour
retirementfundbeforeyourgoldenyears.

Takinginsurancelightly
Individualsintheir30softenneglecttoprotectthemselveswithadequateinsurance.Theyoftenloseoutonthechancetobuylifeinsuranceata
lowerpremiumanddelaythepurchaseofdisability,personalaccidentorhealthinsurance.Goingwithoutsufficientcoverageisfinanciallyrisky.
Withhavingdependentssuchasspouse,childrenandagingparents,itguaranteesafinancialsafetynetforyourentirefamilyifsomethingwere
tohappentoyou.

In your 40s

Inthe40s,onewouldmostprobablyhavereachedthepeakoftheircareerandbeearningsubstantiallymorethanyouwereinyour20s(oreven
your30s).However,manyarestillbusyspendingmoneyonthethingstheywantrightnow,suchasvacations,biggercars,ornewhouses,and
delayingtheirretirementsavings.

Notreviewingyourinvestmentportfolio
Yes,itisagoodthingthatyouhaveanactiveinvestmentportfolio,butasyougothroughdifferentstagesinlife,yourrisktolerancechanges.You
mayhavebeenwillingtotakemoreriskswhenyouwereinyour30sasyoustillhadtheabilityandtimetoearnanincome.However,asyouare
nearingretirement,youmaywanttoreviewyourportfoliotoallocatemoreofyourassetsinmoreconservativeinvestments.However,moving
yourinvestmentstoasaferavenuetooearlycouldalsocauseyoutorunshortonyournestegg.Youneedtoensurethatyoursavingscan
supportyouwellthroughretirement.Balanceisthekey!

Ignoringwill
Obviouslyitishardtoimaginebeinginyourdeathbedwhenyouarestillyoungandactive.However,writingawillshouldbeonyourmustdolist
whenyouareinyour40s,ifnotearlier.Awillprotectsyourfamilyandyourassetsifsomethinghappenstoyou.Italsoensuresthatyouhavean
attorneythatwillmakefinancialandlegaldecisionsonyourbehalfifyoubecomeincapacitated.

In your 50s

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Inthe50s,yourchildrenareinuniversityandonlyadecademoretogobeforeretirement.

Usingretirementsavingstopayforchildseducation
Ifyouhavechildren,itisnotwrongtohelppayfortheirtertiaryeducationrelatedexpenses,butnotattheexpenseofyourretirementsavings.
ToomanyparentssacrificetheirretirementsavingsandwithdrawfromtheirEPFinfavouroftheirchildrenseducation.Putyourretirementneeds
firstanddowhatyoucantosaveforboth,whichiswhyitsimportanttostartplanningforbothasearlyaspossible.

Investinglikeyouareinyour30s
Asyouarenearingyourretirementyoubecomeevenmoreprotectiveofyoursavingsinyour50s.Consideringthefactthatyoucouldbeliving
wellintoyour80sor90s,yourequireasubstantialamountinretirement.Simplypreservingcapitalisnotasustainablefinancialstrategy,the
moneymustbeputtowork.Whileinvestingmoneyinaninvestmentisrisky,itisequallyriskyforifthemoneyiskeptunderthemattress.So
makesureyoukeepgrowingyournesteggwellintoyour50sandbeyond,tocombatagainstinflationandsupportyoufinancially.

In your 60s

Inthe60s,youhavefinallyretired,wrinklessetin,andyourchildrenhavesettledandhavestartedtheirownfamilies.Moneybecomesextremely
importanttoyounowthatyounolongerhaveanincomestream.Thebestcasescenariowouldbetoenjoyyourgoldenyearsinrelaxationanddo
thingsthatyouweretoobusyordidntgettochoosebefore,whenyouwerestillclimbingthecorporateladder.

Completelyabandoninginvestments
Youtendtobuildyourfundsuntilyouretire,andthenstopproactivelybuildingandstartlivingoffthosefunds.However,retireescancontinueto
maximiseontheirinvestmentstostretchtheirretirementincomethroughinvestmentsthatoffermonthlyorquarterlydistributions.Ensuringyour
investmentsdeliverasteadyincomestreamcanhelpyoubettermanageyourbudgetandstretchyourmoneyfurther(Findoutwhatarethelow
riskinvestmentsthatretireescaninvestin).

Notmaintainingamedicalinsurance
Asyougrowolder,yourmedicalinsurancebecomesmoreandmoreexpensive.Mostpeoplewouldcancelit,andfocustheirfinancesinother
areasoftheirlives.However,thereisareasonwhythecostofmedicalinsuranceincreaseintandemwithyouragepeopleareproneto
sicknessastheygetolderandmedicalbillswouldstartpouringin.Thatiswhenitwillhitthatyoushouldhavekeptyourmedicalinsurance.
Makingfulluseoffinancialopportunityateverydecadeofyourlifeisimportant.Moremoneyhandledappropriatelymeansmoreopportunities
andmorefinancialsecurityforyouandyourfamily.

Knowing your net worth will allow you to evaluate your nancial standing and help you
meet your nancial goals.

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writingandexternalaffairs,priortojoiningiMoney.myasawriter.Shehasalsodonefreelancewritingandeditingforvarious
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