10 Worst Financial Decisions & How to Recover From Them

Here is a riddle for you: 

You all dread me but can’t seem to avoid me. I cost you financially and mentally yet you never learn. What am I?

Financial blunders! 

One minute you are in your prime, shopping your heart out and the next you are looking for a time machine at any cost to reverse your money decisions. 

Today let’s discuss the 10 worst financial decisions and how to recover from them because let’s face it recovering from financial errors is a skill we all need. 

So let’s talk about those common mistakes in investing and other money mishaps we have all made or are likely to make. 

10 most financial decisions and how to recover from them 

1. Ignoring the budget 

Imagine this: you are scrolling through Instagram and you suddenly see a gorgeous lehenga for your cousin’s wedding but it cost more than your monthly rent. Will you ignore it or will you buy it? The temptation is real, right? 

Recovery strategy: It’s time to face the numbers. Start tracking your expenses and create a realistic budget. You can use Lxme’s budget planner for this.

2. Credit card craze

This plastic can be the bane of your existence. It’s all fun and games until the bill arises and you realise that you have spent enough to fund a small nation. So, overusing your credit card without checking is the classic money mistakes to avoid.

Recovery strategy: Start by paying more than the minimum amount each month. Research and take personal loans with lower interest rates, if you have to. You can also borrow with Lxme. Recovering from financial adversity is a marathon and not a sprint, so take your time to pay it back. 

3. Not having an emergency fund 

Life can throw lemons at you anytime. Without any emergency fund, it’s like driving without a seatbelt. You are likely to get hurt in case things go wrong.

Recovery strategy: Build your emergency fund to always be prepared for the unexpected. You can build one with Lxme’s Savings Challenge where you invest small amounts every day to create your safety net. 

4. Copying the celebrities 

We all love Bollywood, the gossip, the lifestyle, and the glam. But trying to live your favourite celebrities’ lifestyle is one of the most common mistakes in investing. 

Recovery Strategy: It’s called reel life, not real life for a reason. What you see on social media is not the truth. Focus on your own financial goals and what truly brings you joy.

5. Joint finances without a plan

Love is blind, but your bank account shouldn’t be. Merging finances with your partner without having a proper plan in place can be disastrous. 

Recovery Strategy: Have open conversations about money with your partner. Set clear financial goals and responsibilities and always keep a separate account for yourself.

6. Investing in ‘Hot Tips’

One of the most common mistakes in investing is believing your neighbour’s chacha’s uncle’s bua’s damad investment tip because he heard it from someone else. It could leave you with empty pockets, trauma, and bad investment recovery. 

Recovery Strategy: Do your research, diversify your investments, and when in doubt, consult a financial advisor or register for Lxme’s 1:1 Session with experts to clear your doubts. It is one of the best money recovery strategies. 

7. Neglecting insurance

Would you rather be stuck in a downpour without an umbrella? No, right? Skipping on insurance is a risk you can’t afford to take, they are life savours.

Recovery Strategy: Review your insurance needs: health, life, vehicle, property etc, research about them, and get the ones that suit your needs the most to recover from financial setbacks.

8. Leaving retirement planning for later

 Retirement seems like a distant dream, right? But your future self will thank you for starting early. This is one of those money mistakes to avoid at all costs!

Recovery Strategy: Start now, no matter how small. With Lxme’s Retirement Calculator, you can calculate the corpus you will require to retire comfortably and how to invest and achieve it.

9. Emotional spending

Bad day at work? Shopping therapy! Good day at work? Celebratory shopping! Your emotional spending can make you broke and sad.

Recovery Strategy:  Find non-monetary ways to cope with emotions that can include home workouts, painting or just dancing at home.  Recovering from financial mistakes often starts with understanding our emotional triggers.

10. Not being financially literate

Money matters can seem very complicated and daunting, but it’s a life skill that you need to learn

Recovery Strategy: You can be a pro at money management, you can learn with Lxme’s resources, live sessions, and blogs. You can even be a part of Lxme’s community to connect with like-minded women to discuss money matters in a safe space.

We all make mistakes, but it’s how we recover that count. Recovering from financial errors is part of the journey to financial freedom. It’s never too late to plan for your finances and avoid financial mistakes in the future.

The key is to learn from these experiences and use them as stepping stones to make better choices and keep recovering from financial setbacks. Whether it’s common mistakes in investing or day-to-day money management, you’ve got this. Go, slay those money goals!

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