10 Financial Mistakes Made by the Salaried Class

Avoid These 10 Financial Mistakes to Secure Your Future

Aman Bhatia
5 min readJul 13, 2023
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Financial management is a crucial aspect of everyone’s life, especially for the salaried class. Unfortunately, many individuals lack the necessary knowledge and understanding of how to handle their finances effectively.

In this article, we will explore ten critical financial mistakes commonly made by the salaried class. By understanding and avoiding these mistakes, you can make better financial decisions and secure a prosperous future.

#1. Underestimating the Impact of Inflation

One of the most crucial lessons in finance is understanding how quickly money loses its buying power due to inflation. Over time, the value of money diminishes, reducing its purchasing power.

It is essential to realize that simply saving money without investing it can lead to the erosion of wealth. By exploring investment options that outpace inflation, such as index-based investing, you can protect your financial future.

#2. Neglecting to Beat Inflation

While growing your wealth is important, ensuring that your investments beat inflation is equally crucial. Merely keeping pace with inflation will not help you achieve your financial goals. By considering investments that provide higher returns than the inflation rate, you can safeguard your purchasing power and build wealth over time.

#3. Delaying Insurance Coverage

Getting insurance is YOUR responsibility to your family and loved ones. You may hate it but it is your responsibility. — Jeremiah Say

Failing to prioritize insurance coverage is a common financial mistake. Medical expenses, especially in countries with high medical inflation rates, can be financially burdensome. By obtaining health insurance coverage early on, you can protect yourself and your family from unforeseen medical expenses. Additionally, acquiring insurance at a younger age often results in lower premiums.

#4. Overlooking the Benefits of Fixed Deposits

Fixed deposits may not offer the highest returns, but they are a valuable asset for emergencies. Building an emergency fund equivalent to six to twelve times your monthly income can provide a safety net during unexpected events. Fixed deposits and liquid debt funds offer stability and can be utilized to explore investment opportunities when the market is favorable.

#5. Ignoring Non-paper Assets

“Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.” WARREN BUFFETT

Diversifying your portfolio beyond paper assets, such as cash, stocks, or cryptocurrencies, is essential. Non-paper assets, like real estate or physical gold, provide a hedge against inflation and offer greater stability. By considering investments that the government has limited control over, you can protect your wealth in case of extreme economic conditions.

#6. Mishandling Loans

Taking loans without proper consideration is a significant financial mistake. Loans should be taken for productive purposes, such as real estate investments that can offer tax benefits, rather than for depreciating assets like cars. A proper understanding of loans, including interest rates, repayment terms, and tax implications, is crucial to make informed decisions.

#7. Neglecting Cash Flow Management

Maintaining a positive cash flow is essential for sound financial management. It is vital to ensure that your income exceeds your expenses, allowing you to save and invest effectively. Overleveraging yourself with loans or excessive spending can lead to negative cash flow, making it challenging to meet emergencies and limiting your financial flexibility.

#8. Blindly Trusting Government Schemes

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While government schemes may appear attractive, it is crucial to evaluate them critically. Not all government schemes provide optimal returns. For instance, investing in schemes like Sukanya Samriddhi Yojana may not beat inflation in the long run. It is essential to assess alternative investment options that can potentially offer better returns over an extended period.

#9. Relying on Borrowed Convictions

Depending on others’ investment advice without understanding the underlying rationale can be detrimental to your financial well-being. Developing your own investment system based on thorough analysis and personal conviction is crucial. Having a clear understanding of your investments, including entry and exit points, can lead to better financial outcomes.

#10. Lack of Vision and Tax Optimization

Having a vision for your finances is essential to achieve long-term goals. Optimizing taxes through legal means, such as starting a business or taking advantage of available deductions, can significantly impact your wealth accumulation. By exploring avenues to minimize your tax liabilities, you can maximize your savings and create a more secure financial future.


Avoiding these ten critical financial mistakes can help the salaried class make informed decisions, protect their wealth, and achieve their financial goals. Understanding the implications of inflation, investing wisely, securing appropriate insurance coverage, managing cash flow effectively, and having a clear financial vision can pave the way for financial success and security. Take charge of your financial future and make the right choices today.

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Aman Bhatia

2X Top Writer on Medium. Books, Life Lessons, Money, Self Improvement. Follow for inspiration and growth. Mail: amanbhatiakkr@gmail.com