|May 24, 2017||0|
Everyone loves money, particularly spending it! Getting 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? Even if you get paid heaps of money doesn’t suggest you’re good with it. There are lots of successful people who have significant issues with money just because they weren’t aware of the warning signs. In today’s world, it’s crucial to be money conscious so here are 5 signs that you may have issues with money which can subsequently cause serious financial problems down the track.
Many of us get comfortable with our lifestyles – our car, our home, our work – and forget that things can certainly go wrong and every person needs some financial insulation for rainy days. Without any savings in the bank, what will protect you from events like 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 need to get a short-term, high interest loan which will only exacerbate the problem – you can’t save any cash now so how will you pay back an additional expense? Although 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 shows a lack of care and respect for your hard-earned cash, and can certainly lead to financial issues in the near future. Try making a budget and actively complying with it. This will support you in having a greater awareness of your finances so you can realise how much of your money is being eaten away on nonessential items. After a month or so, reward yourself for sticking to your budget and you’ll appreciate spending money on yourself a whole 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 problems. It can take many years, even decades, to erase a credit card debt by only making minimum repayments. Meanwhile, interest charges will be eating away all your potential savings while you’re effectively just treading water. If this sounds familiar, it’s time to make a change and quickly. You have to get your priorities right by making a plan, following a budget, and saving as much money as possible to pay off your remaining debts.
Spending more than you earn
The most evident sign of money problems is where your spending surpasses your income. Whether or not you have a comfortable savings account, you should always make sure that your income is greater than your expenses, it’s just basic maths really. If you find yourself in a bad habit of spending too much, it can become addictive and lead to even more issues, on top of potential financial difficulties. A number of people try to disguise this problem by paying bills with their credit cards which just makes the problem worse in the long-term. Do you even know if your income is higher than your spending? If you’re uncertain, it’s certainly a good time to find out and make some adjustments.
You have new clothes in your wardrobe that you don’t use
A useful way to check if you have money problems is to search through your wardrobe. Do you have clothes that still have the price tag on them? Almost everyone loves a sale, and it’s a nice way to save money when cash is tight and you need something. But purchasing clothes simply because they’re on sale may indicate that you have money troubles. If this is the case, you may additionally be inclined to purchase other items simply because they’re on sale too. Purchasing unnecessary items under the impression that you’re saving money is something that ought to be remedied.
Despite how much you get paid, if you’re not good with money then now is the time to adjust your habits to stay away from potential problems 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, reach out to Fresh Start Solutions Gold Coast on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-goldcoast