|May 24, 2017||0|
Everyone loves money, particularly spending it! Getting new toys or new clothes that make you look and feel good 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 heaps of money doesn’t imply you’re good with it. There are lots of successful people who have big problems with money just because they weren’t familiar with the warning signs. In this day and age, it’s vital to be money conscious so here are 5 signs that you could have problems with money which can inevitably cause serious financial troubles down the track.
You don’t have any savings
Most of us get complacent with our lifestyles – our car, our home, our profession – and forget that things can actually go wrong and every person needs some financial insulation for rainy days. Without having any savings in the bank, what will protect you from incidents 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 world of pain. You’ll have to take out a short-term, high interest loan which will just intensify the problem – you can’t save any money presently so how will you pay off an extra expense? While it’s easy to ignore, having no savings is a recipe for disaster and you should act now before it’s too late. Most financial advisors advise 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 signals a lack of care and respect for your hard-earned cash, and can unquestionably trigger financial problems before you know it. Try making a budget and actively adhering to it. This will support you in having a better awareness of your finances so you can comprehend how much of your money is being squandered on needless items. After a month or so, reward yourself for sticking to your budget and you’ll value spending money on yourself a lot 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 troubles. It can take many years, even decades, to get rid of a credit card debt by only making minimum repayments. Meanwhile, interest payments will be eating away all your prospective savings while you’re virtually just treading water. If this sounds familiar, it’s time to make a change and quickly. You should get your priorities straight by creating a plan, adhering to a budget, and saving as much money as possible to repay your ongoing debts.
Spending more than you earn
The clearest sign of money problems is where your spending surpasses your earnings. Even when you have a comfortable savings account, you must always ensure that your income is greater than your expenses, it’s just basic maths really. If you get into a bad habit of spending far too much, it can come to be addictive and trigger even more issues, on top of likely financial difficulties. Some people attempt to mask this problem by paying bills with their credit cards which merely makes the situation worse in the long run. Do you even know if your income is more than your spending? If you’re uncertain, it’s certainly a good time to find out and make some improvements.
You have new clothes in your wardrobe that you don’t use
A basic 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? Everyone loves a sale, and it’s a good way to save money when cash is tight and you need something. But buying clothes purely because they’re on sale may signal that you have money issues. If this is the case, you may additionally be inclined to buy other items simply because they’re on sale too. Purchasing nonessential items under the impression that you’re saving money is something that has to be corrected.
Despite how much you get paid, if you’re not good with money then now is the time to modify your habits to stay away from 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 blow and you’ll be pulled into the financial abyss. To find out what options you have, or to talk to someone about your finances, reach out to Fresh Start Solutions on 1300 818 575 or visit http://freshstartsolutions.com.au