|May 24, 2017||0|
Everybody loves money, especially spending it! Buying new toys or new clothes that make you feel and look great 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 lots of money doesn’t suggest you’re good with it. There are lots of successful individuals who have big issues with money just because they weren’t familiar with the warning signs. Today, it’s critical to be money conscious so here are 5 signs that you could have problems with money which can subsequently bring about serious financial problems down the track.
You don’t have any savings
Many of us get complacent with our lifestyles – our car, our house, our profession – and forget that things can certainly 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 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 world of pain. You’ll need 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 repay an additional expense? Even though it’s easy to ignore, having no savings is a recipe for disaster and you should take action now before it’s too late. The majority of 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 comes in, and where it goes when you spend it. If you have no idea where your money is being spent, it indicates a lack of care and appreciation for your hard-earned cash, and can surely cause financial issues down the track. Try creating a budget and actively complying with it. This will aid you in having a greater understanding of your finances so you can understand how much of your money is being eaten away on unneeded items. After a month or so, reward yourself for sticking to your budget and you’ll enjoy 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, specifically credit cards, then you’re heading for financial troubles. It can take years, even decades, to clear a credit card debt by only making minimum repayments. In the meantime, interest charges will be eating away all your prospective savings while you’re basically just treading water. If this sounds familiar, it’s time to make a change and quickly. You need to get your priorities straight by creating a plan, sticking to a budget, and saving as much money as possible to pay off 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 healthy savings account, you should always ensure that your earnings 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 become addictive and result in even more issues, in addition to likely financial difficulties. Some people try to disguise this problem by paying bills with their credit cards which only makes the problem worse in the long run. Do you even know if your income is higher than your spending? If you’re not sure, it’s certainly a good time to find out and make some changes.
You have new clothes in your wardrobe that you don’t use
A useful way to check if you have money problems is to look in your wardrobe. Do you have clothes that still have the tag on them? Almost everyone loves a sale, and it’s an excellent way to save money when cash is tight and you need something. But purchasing clothes only because they’re on sale may reveal that you have money troubles. If this is the case, you may also be inclined to buy other items purely because they’re on sale too. Purchasing unnecessary items under the impression that you’re saving money is something that has to be fixed.
Regardless of how much you get paid, if you’re not good with money then now is the time to change your habits to stay clear of possible complications in the future. If any of these warning signs sound familiar to you, it may signal 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 drawn into the financial abyss. To find out what options you have, or to talk to someone about your finances, contact Fresh Start Solutions Adelaide on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-adelaide