Financial Tips: These 5 habits related to finance will make you bankrupt, do not make this mistake

Managing money is more difficult than earning it (how we earn money). A small mistake can make you poor. That is why experts say that every person should know about such good habits related to finance (Financial Tips) so that money can be saved and invested properly. Know about 5 such habits: (5 Financial Mistakes)

Not taking health and term insurance

Do take health insurance and term insurance. When a person is admitted to the hospital due to illness, you do not know how much the bill will be. Many times the money saved or invested is spent on this. Therefore, it would be better to take health insurance (family floater) for all the members of the family. 

If there are two or three members in the family, then one must take health insurance of at least Rs 5 lakh. Also take term insurance. In fact, to ensure that other family members do not have to face financial problems on the death of a person, one must take term insurance. The insurance cover of term insurance should be at least 10 times the annual income.

do not limit expenses

There should never be a situation where the income is less and the expenditure is one rupee. There are many people who are not able to manage their expenses properly. On receiving salary, such people do not spend the money but squander it. And when the end of the month comes, they are almost out of money. Therefore, keep your expenses limited so that you do not have to beg in front of anyone at the end of the month. Maintain a balance between expenses and income.

Not saving before spending

Experts say that as soon as you get your salary, keep aside some money for savings before spending it. If you are not married and do not have any responsibilities, then at least 50% of your earnings should be invested in savings and investments. The rest of the money should be used to meet other needs. 

If you are married and do not have children, then 30% of your money should be saved. If you have children, then the amount to be saved or invested should not be less than 10% in any case. There is a rule that 60% of your earnings should be spent on household needs, 30% on other expenses and 10% on savings.

Not investing or saving money 

Don't just save money, invest it too. Actually, the value of money decreases with time. So invest money in a place where its value increases. Think, how much will be the value of 5 lakh rupees today after 10 years? Probably equal to 3 or 4 lakh rupees. 

So invest the money. For this, you can invest in mutual funds through SIP. You can also invest in PPF or NPS. If you have knowledge about the stock market, then you can invest there too.

Not creating an emergency fund

Every person should have an emergency fund. It is better if this emergency fund is 12 times your monthly expenses, i.e. equal to 12 months' expenses. You can invest the amount of this fund in equity or liquid debt fund. 

The annual interest rate in liquid fund can be 6 to 9 percent. Also, its biggest advantage is that if you lose your job or suddenly need money, then this fund can be used. In such a situation, you can avoid taking a loan.