Seven Money Mistakes That Quietly Cost Indians the Most

The expensive mistakes in personal finance are rarely dramatic. They're ordinary choices, repeated, that compound against you. Here are seven we see most often.

1. Buying insurance as an investment

Endowment and money-back plans promise safety and returns. Usually they deliver too little cover and returns of 4 to 6% a year. A term plan for protection, plus a separate investment for growth, almost always does better on both.

2. Withdrawing EPF when changing jobs

It feels like a bonus. It's a tax-efficient, 8%-plus debt investment you'll struggle to replace, broken for a new phone or a holiday. Transfer it instead.

3. Carrying a credit card balance

At 36 to 45% a year, a revolving balance costs more than any investment can reliably earn. Paying the minimum due keeps the card “current” and your debt growing.

4. No emergency fund

Without one, every surprise becomes debt or a forced sale of investments, often at a bad time. Three to six months of essential expenses, kept liquid, protects everything else.

◇Try the emergency fund calculatorHow big your safety net should be.

5. Stopping SIPs when markets fall

The months you pause are the months your SIP would have bought the most units. The fall doesn't damage a long-term plan; stepping away from it does.

6. Trading futures and options for income

SEBI's study of FY 2022 to FY 2024 found that about 93% of individual F&O traders lost money, with aggregate losses of over ₹1.8 lakh crore. It's not a side income; for most people it's a slow leak.

7. Waiting to start

The most expensive mistake is also the most common: waiting until you earn more, understand more or the market “settles”. Ten years of delay can cut what a SIP is worth at retirement by more than half.

ΔTry the cost of delay calculatorWhat waiting a few years to start really costs.

None of these needs a financial genius to fix. They need a few rules, set once and kept.

Source: SEBI — Study on Profits and Losses of Individual Traders in Equity F&O