WHY FINANCIAL BEHAVIOUR DECIDES WEALTH OUTCOME

YOU want to do the right thing when it comes to money. Your hardearned income deserves better direction and management to generate the wealth effect needed to meet your lifestyle goals.

- RAJAS KELKAR

However, your financial well-being has a lot to do with your behaviour. This column has touched upon it regularly. A study published earlier this year in Malaysia suggests that individuals with a firm grasp of personal finance and money management are more inclined to make prudent financial choices, exercise self-control, and avoid excessive spending.

The operating words are ‘prudence’, ‘self-control’ and ‘avoiding excessive spending’. new data from the Reserve Bank of India shows that credit card defaults are rising in India. The ease you can spend can have a ripple effect on your wealth outcome. Financial technology or Fintech companies play a role in causing that ripple effect. They simplify spending money you do not have or spend tomorrow’s money today. A study of the lower income households in Malaysia last year found that due to the ease of buying digitally, the desire to have a stylish lifestyle and display an image of wealth was a driving factor for them to buy luxury cars, stylish homes or high-end electronic devices. In many instances, people used debt.