{"id":281921,"date":"2025-11-14T05:43:24","date_gmt":"2025-11-14T05:43:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/281921\/"},"modified":"2025-11-14T05:43:24","modified_gmt":"2025-11-14T05:43:24","slug":"ca-reveals-9-financial-habits-silently-killing-your-wealth-and-how-to-fix-them","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/281921\/","title":{"rendered":"CA reveals 9 financial habits silently killing your wealth \u2014 and how to fix them"},"content":{"rendered":"

Many people face the situation in their lives when they stay cash poor despite earning well. The reason is that they spend what they earn. They hardly think about investing, or if they start it, they begin late, only to lose important years of compounding. High-interest loans, purchasing things under societal pressure and making wrong investment choices aggravate the problem further. In a social media post on X (formerly Twitter), chartered accountant Nitin Kaushik<\/a> highlights 9 financial mistakes that most people make without even realising and suggests ways to avoid them.
1. Mixing insurance with investmentWhole life or endowment plans sound comforting \u2014 \u201csafety + returns\u201d \u2014 but they do neither well.<\/p>\n

A plain term plan protects your family.<\/p>\n

Mutual funds grow your wealth.<\/p>\n

Pure term insurance + mutual funds often outperform them \u2014 both in protection and growth.<\/p>\n

Also Read: EPF taxation rules explained: Do you need to pay income tax if you withdraw your Employees’ Provident Fund before 5 years of service?<\/a><\/p>\n

2. Co-signing someone else\u2019s loanIt feels kind-hearted in the moment.<\/p>\n

But if they miss a payment, their credit score takes a hit.<\/p>\n

Generosity with money should never come with a legal signature attached.<\/p>\n

Also Read: ‘Buy only what you can pay in full’: CA explains why this old, middle-class wisdom about money management is relevant even today<\/a><\/p>\n

3. Paying only the \u2018minimum due\u2019 on credit cardsThis one is a silent wealth killer.<\/p>\n

Rs 50,000 unpaid can balloon to over Rs 1 lakh in just two years at a 36% interest.<\/p>\n

That\u2019s not a credit card \u2014 it\u2019s a time bomb.<\/p>\n

Chartered accountant Foram Naik Sheth \u2013 KMP, Wealth Management<\/a> Solutions, NPV Associates LLP, says that overreliance on loans and credit cards leads to high interest payments and late penalties and creates debt pressure. <\/p>\n

“One missed EMI drops your CIBIL score, raising future borrowing costs and trapping you in a debt cycle,” says Sheth. <\/p>\n

Also Read: SEBI advisory on digital gold: Is it time to redeem your investments? Know what experts advise<\/a><\/p>\n

4. Pay in full, or not at allInvesting in what you don\u2019t understand<\/p>\n

Crypto, NFTs, or some ‘guaranteed’ scheme your friend swears by.<\/p>\n

If you can\u2019t explain in one sentence how it makes money \u2014 you\u2019re not investing, you\u2019re guessing.<\/p>\n

Curiosity is free. Confusion is costly.<\/p>\n

Sheth says that investment decisions based on tips and fear of missing out (FOMO) traps lead to poor financial decisions.<\/p>\n

Also Read: SGB investors earn 329% return: Final redemption price for Sovereign Gold Bond 2017-18 Series-VII announced; check details<\/a><\/p>\n

5. Spending more just because you earn moreIt\u2019s easy to call it a ‘reward’, but lifestyle creep is real.<\/p>\n

A Rs 2 lakh salary with Rs 2 lakh expenses = Rs 0 peace of mind.<\/p>\n

You don\u2019t get rich by earning more \u2014 you get rich by keeping more.<\/p>\n

Sheth says that in current times many people mistake the visible display of wealth for financial success. In this quest, they spend all they earn, saving nothing.<\/p>\n

“Lifestyle inflation, the constant urge to upgrade and match a certain lifestyle, has surged in recent years. Many people mistake the visible display of wealth for financial success. In this quest, they spend all they earn and save nothing. To put it in perspective, an Rs 1 lakh invested instead of spent on a luxury watch can grow to nearly Rs 10 lakh in 20 years at a 12% return,” says Sheth.<\/p>\n

Also Read: SGBs deliver 295% return: RBI reveals premature redemption price and date for this sovereign gold bond series; check key details<\/a><\/p>\n

6. Buying a brand-new car on loanIt feels great for the first month\u2026 and painful for the next 60 EMIs.<\/p>\n

A car loses nearly 20% of its value the day it leaves the showroom.<\/p>\n

Buy when you can afford it comfortably, not emotionally.<\/p>\n

7. Going all-in on one thingDiversification isn\u2019t fancy jargon; it\u2019s survival.<\/p>\n

Put your eggs in different baskets \u2014 stocks, debt, real estate, gold.<\/p>\n

A good portfolio grows even when one part falls.<\/p>\n

Wealth builds quietly through balance, not adrenaline.<\/p>\n

8. Home loans that eat up half your incomeEveryone dreams of owning a house \u2014 and that\u2019s fine.<\/p>\n

But if your EMI is 40\u201350% of your salary, that house owns you.<\/p>\n

Keep it under 25%. Freedom is worth more than a square foot.<\/p>\n

Sheth says, “Owning a home is a dream for many, but taking a large home loan too early can be financially restrictive. High EMIs eat into savings, reduce liquidity, and limit career flexibility.”<\/p>\n

9. The worst trap \u2014 payday or instant loansThey promise \u201cquick help\u201d but come with 40\u201350% annual interest.<\/p>\n

It\u2019s like borrowing from your future self\u2026 at a massive premium.<\/p>\n

If you need one, pause and rebuild your budget. The loan isn\u2019t the fix \u2014 the discipline is.<\/p>\n

Sheth also suggests following 7 money habits that can help one generate wealth.<\/p>\n

Create an emergency fund<\/a> of at least 6 months of expenses.Buy a pure term insurance plan of at least 10X of annual income. Avoid ULIPs or endowment plans.Get comprehensive health cover.Cap your lifestyle expense to a certain percentage of income. Follow the 50-30-20 rule. 50% – needs, 30% – wants and 20% – savings.Pay credit card dues on time every month.Define your goals. Invest through SIPs. Take help from a qualified financial advisor for your investments.Buy a home after you achieve financial stability and can keep EMIs below 30-35% of income.<\/p>\n","protected":false},"excerpt":{"rendered":"Many people face the situation in their lives when they stay cash poor despite earning well. The reason…\n","protected":false},"author":2,"featured_media":281922,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,5033,128251,20351,133,32047,128253,128252,128254,131,5970,132,31344],"class_list":{"0":"post-281921","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-credit-card-debt","12":"tag-diversification-in-investments","13":"tag-emergency-fund","14":"tag-finance","15":"tag-financial-habits","16":"tag-home-loan-tips","17":"tag-investment-mistakes","18":"tag-nitin-kaushik","19":"tag-personal-finance","20":"tag-personal-finance-tips","21":"tag-personalfinance","22":"tag-wealth-management"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/281921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=281921"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/281921\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/281922"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=281921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=281921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=281921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}