The Problem

Repeatedly committing the same mistake with the hope that the outcome will change is similar to tossing a coin and expecting the same result to come up every time. You know what the problem is and yet you choose to do nothing to resolve it. By not acknowledging the mistake, you are harming your finances. You also tend to believe that things will get better the next day, which is a much serious mistake. While you are able to spot and comment on the mistakes committed by others, when it comes to you, the belief that things are fine can lead to disastrous financial outcomes. You believe that your mistakes will settle on their own.

Example

You keep money in bank savings account knowing very well that you don’t need it for two years and that the interest earned will be low and also be taxed. You could set limits on how much money you will keep in the bank and anything above that should automatically be routed to other assets and options. Think of tax efficiency, liquidity and your need when handling money.

Suggested intervention

Make a checklist of your blind spots and keep referring to it, till such time that the blind spots no more remain. Never rush or make hasty decisions with money, because you will be forced to refer the checklist and overcome any blind spots that you face. Just the way your body tells you when it is time to eat or sleep, awaken your mind to overcome blind spots, lest it leaves your finances in a blind spot. You could also overcome the blind spot by repeatedly analysing it, making note of it and then working towards avoiding it.

Tip

Never take a financial decision in a hurry. Plan in advance, weigh out all the possible outcomes before you decide. If you are unsure, consult others and take time, but do not decide in haste.

Read: Inside the Mind of Investors

olmdesk@outlookindia.com