|May 24, 2017||0|
Everyone loves money, particularly spending it! Getting new toys or new clothes that make you look and feel great 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 mean 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 crucial to be money conscious so here are five signs that you might have problems with money which can gradually trigger 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 jobs – and forget that things can actually go wrong and every person needs some financial cushioning 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 hit and you’ll be in a world of pain. You’ll have to take out a short-term, high interest loan which will just magnify the problem – you can’t save any money currently so how will you repay an additional expense? Whilst it’s easy to ignore, having no savings is a recipe for disaster and you should take action now before it’s too late. Most financial advisors recommend 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 you receive, 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 obviously lead to financial complications in the future. Try making a budget and actively abiding by it. This will support you in having a better appreciation of your finances so you can recognise how much of your money is being drained 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 manage 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 clear a credit card debt by only making minimum repayments. Meanwhile, interest fees will be eating away all your prospective savings while you’re effectively just treading water. If this seems familiar, it’s time to make a change and quickly. You need to get your priorities right by making a plan, following a budget, and saving as much money as possible to repay your ongoing debts.
Spending more than you earn
The most evident sign of money issues is where your spending eclipses your earnings. Whether or not you have a healthy savings account, you must always make sure that your income is greater than your expenses, it’s just simple maths really. If you get into a bad habit of spending too much, it can come to be addictive and cause even more issues, in addition to potential financial difficulties. Many people try to disguise 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 not sure, it’s probably a good time to find out and make some adjustments.
You have new clothes in your wardrobe that you don’t wear
A useful way to assess 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 great way to save money when cash is tight and you need something. But purchasing clothes only because they’re on sale may illustrate that you have money troubles. If this is the case, you may additionally be inclined to buy other items purely because they’re on sale too. Buying unneeded items under the perception that you’re saving money is something that must be corrected.
Irrespective of how much you get paid, if you’re not good with money then now is the time to change your habits to prevent potential issues in the future. If any of these warning signs sound familiar to you, it may reveal 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 talk to someone about your finances, contact Fresh Start Solutions Sydney on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-sydney