Signs You Could Be Having Money Problems
Everybody loves money, particularly spending it! Buying new toys or new clothes which make you look and feel great is important for your confidence and self-esteem. Yet how do you know if you’re good with money or not? Just because you get paid lots of money doesn’t imply you’re good with it. There are loads of successful people who have huge problems with money purely because they weren’t familiar with the warning signs. In today’s world, it’s important to be money conscious so here are five signs that you may have issues with money which can eventually trigger serious financial issues down the track.
You don’t have any savings
Most of us get complacent with our lifestyles – our car, our house, our profession – and forget that things can certainly go wrong and everyone needs some financial protection for rainy days. Without having any savings in the bank, what will cover you from events such as hospitalisation, job loss or car accidents? If you’re living paycheque to paycheque, all it takes is one financial blow and you’ll be in a lot of trouble. You’ll have to take out a short-term, high interest loan which will just intensify the issue – you can’t save any cash now so how will you pay back an added expense? Although it’s easy to neglect, having no savings is a recipe for disaster and you should take action now before it’s too late. The majority of financial advisors suggest having three to six months of living expenses in an emergency fund.
You have no idea where your money goes
Being good with money means that you know when and how much money comes in, and where it goes when you spend it. If you don’t know where your money is being spent, it illustrates a lack of care and appreciation for your hard-earned cash, and can naturally lead to financial issues before you know it. Try creating a budget and actively abiding by it. This will aid you in having a greater knowledge of your finances so you can recognise how much of your money is being drained on needless items. After a month or so, reward yourself for sticking to your budget and you’ll value spending money on yourself a great deal more.
Making minimum repayments only
If you can only afford to make the minimum repayments on your loans, in particular credit cards, then you’re heading for financial problems. It can take years, even decades, to clear a credit card debt by only making minimum repayments. Meanwhile, interest payments will be eating away all your potential savings while you’re basically just treading water. If this seems familiar, it’s time to make a change and quickly. You need to get your priorities right by making a plan, adhering to a budget, and saving as much money as possible to repay your ongoing debts.
Spending more than you earn
The most evident sign of money issues is where your spending overtakes your income. Even when you have a comfortable savings account, you must always ensure that your income is greater than your expenses, it’s just simple maths really. If you get into a bad habit of spending far too much, it can become addictive and lead to even more issues, in addition to potential financial difficulties. A number of people try to mask this problem by paying bills with their credit cards which simply makes the problem worse in the long run. Do you even know if your earnings is higher than your spending? If you’re not sure, it’s perhaps a good time to find out and make some improvements.
You have new clothes in your wardrobe that you don’t wear
An easy way to evaluate if you have money issues is to search through your wardrobe. Do you have clothes that still have the price tag on them? Everybody loves a sale, and it’s a great way to save money when cash is tight and you’re in need of something. But purchasing clothes simply because they’re on sale may suggest that you have money troubles. If this is the case, you may additionally be inclined to buy other items just because they’re on sale too. Purchasing unneeded items under the impression that you’re saving money is something that needs to be amended.
Regardless of how much you get paid, if you’re not good with money then now is the time to modify your habits to prevent possible problems in the future. If any of these warning signs sound familiar to you, it may suggest that you have problems with money and should seek advice before it’s too late. All it takes is one financial hit and you’ll be sucked into the financial abyss. To find out what options you have, or to talk to someone about your finances, contact Bankruptcy Experts Canberra on 1300 795 575 or visit http://www.bankruptcyexpertscanberra.com.au