B. Srinivasan: Amitabh, a senior manager with a software firm and his wife Shalini, also a manager with a services firm, always believed that together, their earnings, which are actually much more than their needs, have provided them very good financial security. They thought they would never need to take a serious view of the future of their finances. In order not to waste their time, they always made their bill payments through electronic clearance scheme and never bothered to keep an inventory of their expenses or even verify them. Their only requirement is that at any point of time, when they check their bank balance, it should be at least Rs.1 lakh.

People usually do not take care of their finances the way they should. They give least importance till the time they get into a vicious circle from which they cannot escape without a reasonable degree of damages.

The same happened with the couple. With time passing by, they realized that their finances were not as rosy as they thought. They also realized that because of the web they have created, they will never be able to achieve any of their goals in future. More so, it is even too late for them to react.

It is important for everyone to understand their financial situation thoroughly. They must ensure that they will never suffer at any point of time because of their careless attitude. I am trying to highlight the danger signals that you should be careful of, which will show that your finances are not in the right health. They are:

Loan Commitments

This is the first danger signal in this world of free availability of loans. Today, you can get loans for any thing and every thing. In fact, the worst scenario is taking loans for short term investments or investments like mutual funds.