Money has ever been the most important factor in the smooth running of life at every age. Since the evolution of technology has witnessed expenditure growth in every vertical with the advancement in technology, the enormous growth in the need of humans has witnessed irresistible greed for earning and thus enjoying the fullest.

According to Maslow’s Hierarchy of needs theory of motivation the five categories of human needs that dictate human behavior and those are Physiological needs, Safety needs, Love and belonging needs, Esteem needs, and Self-actualization needs.

Money has been the impetus for one to get their needs fulfilled, as it plays a vital role in satisfaction towards the needs.

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• A most common and significant factor is the tendency for people’s conduct and beliefs to conform to those groups of people to which they belong.
• Another considerable component is the endowment effect, which suggests an emotional bias that causes individuals to value an owned object higher, often irrationally, than its market value.
• One more substantial element is the Sunk Cost Fallacy. Sunk Cost Fallacy describes our propensity to pursue an undertaking if we have already invested time, effort, or money into it, whether the current costs outweigh the benefits.

The better part of the century witnessed the volatility of assets and money as compared to early ages, thus led people difficult to sustain their wealth for a comprehensive period of time. This enticing world of Bullion, Real estate, FMCG, and cryptocurrencies has made people enormous rich in a short span of time and thus also vulnerable. Earning lots of money overnight has made people trapped in various scams also.

People got screwed through various fraudulent financial schemes such as Ponzi, scheme, Mississippi scheme, Harshad Mehta Scam, and many others.

Money handling depends upon many things such as how we spend money, how we earn money. Spending is directly dependent upon earning, the more you earn the more you spend, easily you earn and easily you spend too.

Investment nowadays is also diversified from Real estate boom to equity to cryptocurrencies. It has become tricky to handle the money for optimum benefit from such volatile and fragile ways of investment. Most people want to earn maximum benefits within a short span of time, thus resulting in acquiring great loses. As per studies, more than 90% of people globally suffer losses in the equity market because of unprofessional investment attitudes, thus it is important to have proper guidance and knowledge to handle money smartly.

People are often bad at handling money because of an amateur attitude toward investment. It is evident through studies that herd mentality bias led to devastating results in a loss. People are reluctant towards the research before handling money as it is often done through the trend of investment. In the share market, shares of some companies purely run on sentiments, when an indicator suggests a bullish trend people without thinking properly start investing without actually doing proper research and information about the company and resulting in a sudden surge of price in that particular share and single news against the share result in heavy losses of investors. The fall of the Lehmann brothers led to the economic recession of 2008 which resulted in a severe dent in the financial goals of people and wiped off billions of dollars of worth. It took almost a decade to recover from that such recession. The business and the economy were about to get on track but the coronavirus pandemic has put the world to a pause and completely stopped the economic activity of people for over a quarter year. Trillions of dollars of losses were incurred by companies due to covid-19 pandemic resulting in the loss of millions of people around the world.

It has become necessary for one to handle money smartly as unprecedented incidents make people suffer heavy losses. For this one has to manage personal finances successfully and efficiently.

For this one has to do certain things.

• Define financial goal
• Make efficient plan
• Define Budget
• Avoid unnecessary expenses
• Always clear your debts

To hold and grow money properly it is necessary to make a certain financial goal and set a definite span of time to achieve the feat. Planning must be exquisite and effective to get the optimum result without wasting resources. It should be designed in such a way that minimum deviation and maximum output must be achieved. Budgeting must be done in an appropriate way so that the financial crunch must not be an obstacle to achieving your goal. Unnecessary expenses should be avoided and debt reduction must be done efficiently in order to get the smooth running of your certain financial goal. This smart way of handling money with systematic and professional handling can make one good and efficient with it.

Even smart people make Big Money mistakes in money management. This is a fact because IQ has nothing to do with money mistakes. Building an emergency fund and control of your financial future is a key factor in financial success.