COVID-19 pandemic exposed vulnerabilities of many families. One of them was obviously health. While in the initial days the pandemic spared no one, those who did not lead a healthy lifestyle were far more exposed to the disease.

But the pandemic also exposed another serious vulnerability – poor financial preparedness. None of us was prepared for lockdowns, job losses, or income disruptions. However, the effect was more devastating on people without a solid financial backup plan. It showed us that financial health and planning are just as important as physical health.

While many may have learnt their lesson, I still see people repeating some money mistakes, unfortunately. It’s as if they are stuck in a loop, making the same choices and expecting different results. In some cases, it’s ignorance; in others, it’s a lack of planning or poor financial literacy.

Even though I have highlighted many of the problems in my book, The Price of Ignorance, in this blog, I’ll answer some key questions about why we repeat money mistakes and, more importantly, how we can break this cycle.

Q: What is the biggest reason why we don’t learn from money mistakes?

Our ignorance is the biggest reason. We ignore sound financial advice, dismiss past failures, and take money for granted. And before we realise it, we are caught in a web of debts and unexpected expenses.

Ignorance stems from overconfidence, disillusionment, and lack of knowledge. These are symptoms of poor financial awareness. Many people feel that they’ve mastered the art of investing after watching a few YouTube videos or reading a handful of blog posts. They think they don’t need financial advisors.

The result? They lose more money than they make.

Others become disillusioned because they’ve seen their friends or relatives lose money in the market. They conclude that “investments don’t work.” But what works for one person may not work for another. Financial planning is personal and depends on your unique situation, goals and risk profile.

And then there’s the lack of financial literacy among the youth. I often hear statements like, “Fixed Deposits are useless,” or “SIPs don’t give good returns.” These are signs that show poor awareness or a lack of proper financial knowledge.

Every investment serves a different purpose. Some offer security, while others offer growth. This is why it is important to always seek advice from a qualified financial advisor before making big money decisions.

Q: What is the best way to break the cycle of repeating mistakes?

The simple answer is: stop being ignorant about financial matters. But it’s easier said than done because people who repeat money mistakes are caught in a cycle that starts small and snowballs over time.

It might begin with skipping an investment or relying too heavily on credit cards. Then the debt piles up and soon, you find yourself trapped in a loop that feels impossible to break.

Breaking this cycle requires three things. The first is to seek professional guidance. A professional can help you create a personalised plan that matches your income, expenses, risk profile and long-term goals. You wouldn’t perform surgery on yourself, would you? Then why would you perform financial surgery without an expert?

The second step is to build a habit of investing, even if it’s a small amount. Investing ₹500 or ₹1,000 monthly in a mutual fund through SIP might seem insignificant at first, but over time it is the hbit that counts. And you can always keep increasing the investment amount as the income increases. Wealth creation is taking small steps without breaking momentum.

And finally, you must avoid the debt trap. Credit cards can be helpful as instruments to make payment, but if you misuse them by making only partial payments and rolling over the credit, it can destroy your financial health. The same goes for loans with high interest rates taken for luxuries. Use them wisely and make payments on time. Maintain a liquid fund for emergencies. This will help you stay afloat without relying on credit.

Q: Can you make investments yourself?

Of course you can! But the real question is, should you?

Managing investments is a lot like managing health. Suppose you have come down with some type of sickness. Are you going to Google your symptoms and self-medicate, or do you visit a doctor? The internet is filled with advice on managing diabetes, losing weight, or improving immunity, but only a doctor can tailor a plan that fits your condition. Remember, the search engines are not research engines.

Similarly, while financial blogs and videos can offer useful insights, they can’t replace professional experience by assessing your personal situation. I learned this lesson the hard way. I ignored my doctor’s advice once and ended up in the ICU. The same rule applies to finance.

That’s why I sometimes say that Do It Yourself stands for Do the Damage Yourself. You may think you’re saving on advisory fees, but in reality, you might be losing much more in missed opportunities or poor risk management.

Conclusion

Building wealth is not as difficult as it seems. What makes it complicated is our tendency to repeat money mistakes. It’s a pattern driven by ignorance, overconfidence, and lack of financial awareness. Sometimes, we feel like we know everything about investments and only realise we have made a mistake when it is too late. Other times, we are driven by the desire to make quick money. But it’s too late when we find out that it was just a trap.

If we can address these three issues, we can significantly improve our financial health. The key is to take responsibility for your actions and seek professional guidance when necessary.

It doesn’t matter whether you’re in your twenties or fifties; the path to financial security begins with consistency. However, you have a huge advantage if you start early in life. You have more time for allowing compounding to create magic for you.

So, what are you waiting for? Break the cycle and start building wealth today!