Made Major Money Mistake This Year? Here Are Five Ways To Get On Track

Financial difficulties can affect everyone, irrespective of their social status and income. Many people often face financial issues due to poor money management.

Debt burdens, impulsive shopping, lifestyle inflation and lack of regular investments may worsen the situation in the long term. As the festive season of Diwali is over and the year 2025 is approaching an end, it could be a suitable time for a reality check.

An effective investment strategy often ensures financial well-being. All you need is consistency and financial discipline to achieve your goals. However, due to several factors, many people fail to adhere to their investment plans during the year.

Here are a few simple and effective ways to rectify the money mistakes in order to achieve your financial goals.

Preparing a monthly budget for your regular expenses is crucial for financial security. Many people often avoid budgeting, which contributes to money wastage. A monthly budget allows you to allocate your money for various purposes like rent, utilities, fuel, EMIs and groceries. This will also help you to set aside an amount every month for your investments.

It's advisable to adjust your monthly budget as per your needs. As experts often advise, you can follow the 50-30-20 rule and reassess your expenses as well as savings. The rule suggests allocation of 50% of money to needs, 30% towards wants and 20% to savings and investments.

Many people often face financial crises due to the lack of an emergency fund. Unexpected incidents like a medical crisis or a layoff may push you into financial difficulties. In such situations, an emergency fund could come to your rescue.

It will be a prudent step to review your emergency fund and adjust savings as required. If you don’t have an emergency fund, you can start investing at least Rs 2,000-3,000 a month to build a corpus. The target should be to cover at least three to six months of your monthly expenses.

Tracking your lifestyle expenses could be the most effective way to curb spending and save some extra money for investments. It could be tempting to upgrade to a new phone or a high-end car with a rise in income, but it could affect your savings and investments.

As per experts, instead of lifestyle expenses, your investments should also increase in line with your salary appraisal. It’s advisable to reduce lifestyle expenses and invest that ‘extra’ amount for a financially secure future.

Credit Card bills and equated monthly instalments could push you into a debt trap. Many people often face financial crises due to a higher debt burden. This also affects your savings and investments as debt obligations take priority. So, it’s time to review your debts.

Experts advise keeping your EMIs under 15% of your monthly income. An assessment of existing loans and repayment of high-interest loans could help you divert more money towards savings. Debt consolidation could also be an effective way to reduce the EMI burden.

Despite your money mistakes this year, you can put your investments back on track just by analysing your monthly expenses. Impulse buying and unnecessary expenses could eat up your money. By tracking your expenses, you can save an extra amount for your financial goals. It’s also advisable to review your investments as per your financial goals.

Investment goals can be seamlessly achieved with effective money management. You just need to follow financial discipline while avoiding common pitfalls. A periodical review of your savings, investments, budgets and financial goals could also be helpful in fixing money mistakes.