Signs You May Be Having Money Problems
Everybody loves money, especially spending it! Buying new toys or new clothes which make you feel and look good is important for your confidence and self-esteem. But how do you know if you’re good with money or not? Just because you get paid heaps of money doesn’t indicate you’re good with it. There are plenty of successful individuals who have significant problems with money simply because they weren’t familiar with the warning signs. In today’s world, it’s critical to be money conscious so here are 5 signs that you may have problems with money which can inevitably lead to serious financial problems down the track.
You don’t have any savings
Many of us get complacent with our lifestyles – our car, our home, our work – and forget that things can in fact go wrong and every person needs some financial protection for rainy days. Without having any savings in the bank, what will cover you from events like hospitalisation, job loss or car accidents? If you’re living paycheque to paycheque, all it takes is one financial hit and you’ll be in a lot of trouble. You’ll need to get a short-term, high interest loan which will just compound the problem – you can’t save any money now so how will you repay an added expense? Though it’s easy to neglect, having no savings is a recipe for disaster and you should take action now before it’s too late. Most financial advisors strongly recommend 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 you receive, and where it goes when you spend it. If you have no idea where your money is being spent, it suggests a lack of care and respect for your hard-earned cash, and can naturally lead to financial issues down the track. Try making a budget and actively adhering to it. This will support you in having a greater awareness of your finances so you can recognise how much of your money is being squandered on nonessential 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, mainly credit cards, then you’re heading for financial problems. It can take years, even decades, to erase a credit card debt by only making minimum repayments. In the meantime, interest payments will be eating away all your prospective savings while you’re virtually just treading water. If this seems familiar, it’s time to make a change and quickly. You ought to get your priorities right by creating a plan, adhering to a budget, and saving as much money as possible to settle your ongoing debts.
Spending more than you earn
The clearest sign of money issues is where your spending eclipses your earnings. Regardless of whether you have a healthy savings account, you should always ensure that your earnings is greater than your expenses, it’s just basic maths really. If you find yourself in a bad habit of spending excessively, it can come to be addictive and lead to even more issues, on top of probable financial difficulties. Certain people attempt to mask this problem by paying bills with their credit cards which just makes the issue worse in the long-term. Do you even know if your income is higher than your spending? If you’re unsure, it’s definitely a good time to find out and make some changes.
You have new clothes in your wardrobe that you don’t use
A basic way to check if you have money issues is to search through your wardrobe. Do you have clothes that still have the tag on them? Almost everyone 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 only because they’re on sale may suggest that you have money troubles. If this is the case, you may also be inclined to buy other items just because they’re on sale too. Purchasing nonessential items under the perception that you’re saving money is something that has to be amended.
Regardless of how much you get paid, if you’re not good with money then now is the time to adjust your habits to avoid potential complications in the future. If any of these warning signs sound familiar to you, it may indicate that you have problems with money and should seek advice before it’s too late. All it takes is one financial blow and you’ll be sucked into the financial abyss. To find out what options you have, or to speak with someone about your finances, reach out to Bankruptcy Experts Bunbury on 1300 795 575 or visit http://www.bankruptcyexpertsbunbury.com.au