Money Health Checkup

Do you know your Money Disease?

All of us know about the common Physical illnesses. Be it something as minor as the common cold or something major like cancer or heart disease. We even have regular check-ups to make sure that any disease is diagnosed in the early stages and treated immediately so that we can live long, healthy and pain-free lives.   But have you ever considered what Money Diseases you and your family may be suffering from?   Well, here’s a quick short-list of the most common money diseases mapped to behavioral tendencies….

Tendency to Avoid Action

Financial Phobia

Many people feel sick at the sight of bank statements, tax forms and other financial information. Sounds familiar? Although this reaction is common – and may even be natural – this revulsion can cost you a lot of money!

The “Tomorrow” Syndrome

Many of us avoid the simplest to the most important money management tasks for ‘tomorrow’ – whether it’s paying the monthly bills or selecting the right investments or even filing the income tax return. And of course, tomorrow never comes (or comes late, with penalties and opportunity losses).

The Ostrich Syndrome

Dont bury your head in the sand like an ostrichWhen there is a sand storm in the desert, an ostrich doesn’t run or take action to save itself. All it does is bury its head in the sand, not even seeing the storm coming towards it. But does the storm go away because you don’t look at it?

When we perceive financial problems on the horizon, don’t we also behave in the same way rather than facing the problems and trying to prevent or solve them?

Tendency for Too Much Action

Addiction to Risk

Just like alcoholics or smokers, some people are addicted to taking risks. Such people don’t think twice about gambling with their hard-earned money while taking extremely risky bets with their investments (equity/property/gold..), sometimes even on borrowed money. An easy way to lose your shirt!


“If it isn’t broken, don’t fix it”.  However, some of us just need to “do something” with our money. In our restlessness to do something, we even end up doing things we know to be mistakes even before doing them. For example, an investor staring at live share trading terminal just cannot resist the urge to trade and ends up becoming a day trader and loses money.


“Neither a borrower nor a lender be” wrote Shakespeare in Hamlet. However, with banks providing ready  finance, it’s easy to end up living on borrowed money: Education Loans, Home Loans, Car loans, Personal loans, Vacation Loans, large credit card balances, investment loans . . . phew! The list just goes on.. The result – can’t repay EMIs on time, cash crunch in spite of good incomes, bad credit scores and stress!

Tendency for Action in the Wrong Direction

The God Complex

Some of us think we “know everything” there is to know about money management. We are ‘too smart’ to seek advice from professionals or even knowledgeable friends or family members. Our ego doesn’t permit us to learn from others. But what if we’re wrong?

Risk Phobia

“I will only invest if it’s safe” is a common refrain from so many investors. These investors typically confuse short-term volatility with long-term investment risk. In their keenness to avoid risk, they usually end up taking the biggest risk of all – losing their hard-earned money to inflation.

Hatred for Tax

While no one likes paying taxes, for some people, avoiding taxes is almost a sacred, religious duty! For example, a person investing in a tax-free instrument with a 6% p.a. return rather than a taxable instrument providing a 10% taxable return although it actually means a 7% return after deducting taxes!

Myopia (Near Sightedness)

We usually plan and manage our money looking only at the short-term scenario without considering our long-term requirements. For example, more than 90% Indians don’t even know the amount of money they’ll need on retirement; even fewer have actually planned for it properly.

Now the most important questions are these:

1. Which money disease(s) are you suffering from?

2. What are you going to do to make your money healthy?

Looking forward to reading about your views, experiences and feedback on this post!