IndiaLends Advisory

By IndiaLends Advisory

Apr 23, 2019

Common Money Mistakes That People Make When They Are Single

Financial stability is an important aspect of your life and the wrong decisions taken at the wrong time can affect it adversely in the long run. Youths especially when they are single tend to make money mistakes because of lack of knowledge or insecurities which results in debt and financial instability. The sooner we get on top of our finances and investments, the better are the results. It helps in having a bright and stable financial future and increased savings.

We are highlighting some of the common mistakes that people make when they are single, especially young ones-

Spending money brings happiness

A lot of people feel good when they spend money. This gives them temporary happiness but mixing feelings with money can be very dangerous. The need to have someone in life or to talk to is fulfilled by single people in many ways. Some of the common ones are online shopping, going to a mall and shopping there, eating at fancy or fine dining restaurants, etc.

When you miss someone, feel lonely or having a bad day, avoid shopping. The temporary happiness that you get by spending in emotions passes quickly, but the actual savings will help you in the long run.

Emergency savings- what is that?

When you are young or single, you do not think much about the future and tend to live in the present. Due to this, you do not save for the future or emergencies. If you are being able to pay for a few things, like paying rent, food, drinks, clothes, etc. it is more than enough when you are single. The society we live in, being married automatically brings more responsibilities.

However, having an emergency saving even when you are single will help in the long run. If there isn’t an emergency, later on, you can use that saving to buy a car or a house. The current economic situation of our country and the world should be an alarm for you. The recession can hit an industry at any time. It is recommended that you should save 10-12 months of living expenses as a safety net.

No Investments

When you are single or at a young age, investing is not your priority. It sounds boring, consumes times and a lot more confusing. But investing at a young age and when you are single can benefit you a lot. When you think about investing, ask professionals for advice.

A bad investment is clearly a waste of money, however, when you have knowledge and tips; you can make investments that will change your life forever.

Economical but not too much

Sometimes, people get into ‘savings’ mode when they realize that they are too much in debt. It is good to an extent; however, it might get boring and frustrating after a while. You are single and young, but unlike your friends, you are not able to spend that much, you are not able to party; you are not able to go to Goa as you always planned with your friends. This leads you to get into a spending spree.

Bottling up anger and frustration is not healthy for your mental or physical health. You should keep some money only for fun. Now, the definition of fun varies from person to person, however, you should make sure that this amount should not be more. You should spend it as per your wish.

Moving out

After living almost the whole of your teenage life with parents, when you move out for studies, job, etc., you end up spending a lot of money and that too quickly. You need to have a place of your own, you need to pay for groceries and food, payout electricity and water bills. When you are a young and single adult, the moment you start earning, you get into a spending mode. You moving out adds to the expenses. Moving out should be well thought of and with adequate savings.

Long term financial goals don’t exist

Most single individuals, both males and females have short-term financial goals. This includes paying the bills or EMIs. When you have a short-term goal, it means you can always have a long-term goal. You should set up realistic long-term goals like how much you want to save in a year and start working towards it. Long-term financial goals are useful for your ambitions.

Not caring about employment benefits

If you work in a company or you are a government employee, chances are you are paying a small amount from your salary towards health insurance, provident fund, retirement plans or gratuity. Singlehood is being carefree and your young mind doesn’t value these benefits or savings much. However, these can be very beneficial when the time comes. If you go to a hospital for treatment and you are medically insured, chances are you end up paying very less amount as compared to when you don’t have health insurance.  Your company might be having tie-ups with some hospitals for cashless treatment. You should utilize these benefits as much as possible.

Mounting credit card debt

Credit card debt is very high among young individuals. This gets further up when you are single. You use your credit card on dates and end up spending way more than what you can repay. This pushes you into huge debt where you pay a high rate of interest. Paying minimum monthly payment means you will keep repaying the debt for years, most probably till the time you are not single anymore and have other expenses to take care of. Saving is very difficult when you are in debt and the interest is high and keeps building up. You should consider paying off the credit card debt as soon as possible.

Importance to money than growth

As young single individuals, you tend to choose a job with more salary as compared to a job with less salary but better growth opportunities.

It is very important that you choose growth over money. It helps your learning curve, give you opportunities and promotions. If you follow this, it is very likely that you end up earning a better salary than the first job after a short while.

Too much expense on unnecessary stuff

When you are single, you like to flaunt. Buying an expensive phone or gifting one, going on that international vacation, buying expensive perfumes or makeup products are all part of your life. You make it a need to maintain this lifestyle. Young single individuals are suffering from FOMO (Fear Of Missing Out) and it leads to many unnecessary expenses and decreases your savings.

Before buying an expensive, high-end, luxurious product, ask yourself, if you can afford this. You should give it a long thought that whether you really need it or you just want it. Asking yourself these questions might save you from spending heavily on unnecessary stuff and increasing your savings instead.

We hope this article will help you in avoiding the common mistakes made by most young and single individuals. Remember as you sow, so shall you reap.

Previous Article: How To Use A Credit Card Smartly

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