Question

Describe some common money management mistakes that can cause long-term financial concerns? What do you believe to be the major characteristics of an effective system to keep track of financial documents and records

Answer 1

Common money management mistakes that can cause long-term financial concern-

A. Lifestyle inflation due to hike in salary can lead to long-term financial concerns because when the salary may be reduced due to an economic downturn, it will be very hard to adjust to the changing scenarios.

B. stopping of the retirement contributions can also lead to long-term financial functions.

C. Payments of the bills late for income tax late that can generate penalties.

D. Failure to file return of income at appropriate time which can lead to non deduction of various expenditure.

E. Having no life insurance or wrong Life Insurance

F. Having no emergency fund

G. Failure to prepare a budget can also be lethal.

Effective system which keep track of financial document and record should be having these characteristics-

A. These effective financial system will be highly reliable.

B. They can be used for proactive management of various futuristic events.

C. They will be leading to cutting of the cost of negligence like payment of the late tax

D. Timely follow up with the legal regulation will be saving a lot of money