|May 24, 2017||0|
Everybody loves money, especially spending it! Getting new toys or new clothes that 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? Even if you get paid a lot of money doesn’t imply you’re good with it. There are a lot of successful people who have big issues with money solely because they weren’t aware of the warning signs. Today, it’s very important to be money conscious so here are five signs that you could have problems with money which can inevitably result in serious financial problems in the future.
You don’t have any savings
Many of us get comfortable with our lifestyles – our car, our house, our work – and forget that things can actually go wrong and every person needs some financial protection for rainy days. Without 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 need to apply for a short-term, high interest loan which will just exacerbate the problem – you can’t save any money presently so how will you pay back a further expense? Although 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 advise having three to six months of living expenses in an emergency fund.
You don’t know 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 signifies a lack of care and respect for your hard-earned cash, and can certainly trigger financial complications in the near future. Try making a budget and actively complying with it. This will aid you in having a greater appreciation of your finances so you can recognise how much of your money is being drained on unnecessary 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 manage to make the minimum repayments on your loans, specifically credit cards, then you’re heading for financial troubles. It can take many years, even decades, to clear a credit card debt by only making minimum repayments. In the meantime, interest rates will be eating away all your prospective savings while you’re ultimately just treading water. If this sounds familiar, it’s time to make a change and quickly. You have to get your priorities straight by creating a plan, following a budget, and saving as much money as possible to repay your outstanding debts.
Spending more than you earn
The most evident sign of money problems is where your spending eclipses your earnings. Regardless of whether you have a healthy savings account, you should always ensure that your earnings is more than your expenses, it’s just simple maths really. If you get into a bad habit of spending excessively, it can come to be addictive and lead to even more issues, in addition to likely financial difficulties. Certain people try to mask 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 earnings is higher than your spending? If you’re unsure, 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 basic way to check if you have money problems is to take a look in your wardrobe. Do you have clothes that still have the tag on them? Everybody loves a sale, and it’s a good way to save money when cash is tight and you need something. But buying clothes simply because they’re on sale may suggest that you have money troubles. If this is the case, you may also be inclined to purchase other items just because they’re on sale too. Purchasing unneeded items under the impression that you’re saving money is something that will need to be remedied.
Regardless of 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 possible issues 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 hit and you’ll be drawn into the financial abyss. To find out what options you have, or to speak to someone about your finances, get in touch with Fresh Start Solutions Hobart on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-hobart