Vinod Kambli, once a blue-eyed boy of the Indian cricket team, is reportedly going through financial hardship. The man who scored centuries on the ground, failed on the financial pitch.
Today, his financial condition is such that he is willing to do any work related with cricket, to take care of his family. He has pleaded to the Mumbai Cricket Association (MCA) for assignments.
There are many examples across the world of billionaires going bankrupt because of destructive money habits or bad money decisions. Here are some steps you should follow if you don't want to fall on hard times in the future.
Spend Wisely
Spending more than you earn is the most dangerous financial habit. It can easily lead you into a big debt trap. Some people spend more than they earn to impress others. It is very common to see people buying things simply to impress others. For instance, a small family car may serve the purpose for you, but buying a big car, even if a big loan is required for that, may seem the obvious thing to do just because others are doing the same.
Because of such behaviour, a lot of people end up buying things they don’t really need. Avoid spending on unwanted things and save for the future.
Avoid Debt
Avoid taking loans as much as you can. Even if you do, take only as much as you can repay without any hassle.
Also, use your credit card wisely as it can turn into a costly loan if you are not careful.
Have you ever given a thought on how credit card companies make money? If you use a credit card for your shopping and pay off the credit amount, you do not allow them to earn money. Credit card companies make money from those customers who either do shopping on EMI or keep revolving the credit balance.
Typically, a credit card charges 15-20 per cent if you buy things on EMI. Similarly, if you do not pay the credit amount in full, they charge you 2.5-3 per cent per month on the full amount. On a yearly basis, this may work out in the range of 30-36 per cent.
Invest For Future
It’s true that money does not grow on trees, but money grows when you invest it. Simply saving every month and letting the money lie in your bank savings account may not serve the purpose. It is important to invest the money.
Considering higher inflation and the lack of any social security in India, you should start investing in productive asset classes such as equity for your financial goals. Create a second source of income with your investment.
