Let’s begin with me asking you a question and you answering it or at least thinking about the answer. What according to you is the most crucial part of your lives? Yes, your family and their love are, here I want you to think financially. What is that one thing without which you cannot survive? Something after which every human is running in a never-ending race, day in and day out?

Can you guess? I am sure you must have thought of it. Yes, you are right; it is those green bills, a mere piece of paper that has mankind dancing like its puppets. Money is the only thing that is holding us up. Money is the only thing that is responsible for the food we eat, the clothes we wear and the house we live in.

Everybody knows its importance and everybody values it. All of us know that using it wisely is even more critical. Then, how is it possible that people the entire world, be it the rich or the poor tend to lose it?

There is the affluent section, who despite having millions of pounds, ends up losing all of it and go bankrupt. Then there are the poor, who don’t have enough in the way of money, and what little they have is drained by their needs. Then they wait for the next disbursal of income that is if they are lucky.

It is a sad state of affairs. Where do we go wrong? Why is to so difficult to retain money and avoid it slipping through your hands like sand? Let us analyze the common misjudgments made by the rich, the middle-class and of course the poor.


Being injudicious is the prime error in money management. How? Read on.


Like the usual kind of illiteracy, financial illiteracy means that you cannot read and comprehend the financial jargon. If you cannot do that, how can you expect to get returns on your money in the financial markets?

You would be astonished to know that a staggering 90% of investors lose their priced assets upon investing in the stock market. And this is the minimum count, at most about 99% can also say goodbye to their money in the arena of shares. All this is because people are not aware of the concept of investment strategy.


The next one is a lot more common than financial illiteracy. Even the ones who know about it, spending their entire income.

You work hard every day; I know you have every right to spending your hard-earned money. However, don’t spend the entirety of it. Living “hand to mouth” should not be a financial strategy.

It may be so that your income is too low that you have no way around it. Your life is stuck to follow the paycheck to paycheck regime. But introspect, do you need the fancy 1000 thread count sheets? Can’t you go without the Netflix subscription? Would it be a crime to have home-brewed coffee than the everyday cup from Starbucks?

The answer to all of these will not let you drain all your money.


The previous mistake and this one are co-related. If you do not live hand to mouth, you will have a safe deposit as your back up and vice-versa.

Not having enough balance in your bank account to rely upon in emergencies is a significant reason for debt amongst many of us. Again, introspect and find all the loopholes in your financial management to start saving today.


People have a sad tendency of not knowing their worth. It is another problem in their financial skills. Each one of us has some financial assets to be used in difficult times. It could be your house or your pious retirement fund. Almost all of us think that this fund cannot be touched before you retire, but my friend that is not the case.

Assuming you are in between jobs, and you need money to support yourself right then. Instead of going for doorstep loans for the unemployed, you can borrow from your retirement fund. This way, you will not be paying extra money to the lender in the form of interest and losing it.

You can always add the borrowed amount plus interest in the fund when you are in the right place financially.


Now, you know where all of us are going wrong. The majority of us have made some of the mistakes mentioned above. The rest of us have probably made all of them.

It is alright if you have made one or all. What is important now is to start rectifying your mistakes every day.

Plan before investing your money in the stock market or mutual funds, understand the market trends and do proper research.

Spend frugally and save like a pro.

Before taking a loan, check whether you have an asset that can supplement your needs and save a ton.

Earning money and retaining it, both are not easy tasks. However, if you avoid some mistakes, your financial situation will never turn into a nightmare.


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