|May 24, 2017||Comments Closed|
Everyone loves money, especially spending it! Buying new toys or new clothes which 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 plenty of money doesn’t imply you’re good with it. There are lots of successful people who have serious issues with money just because they weren’t familiar with the warning signs. Today, it’s vital to be money conscious so here are 5 signs that you could have issues with money which can ultimately trigger serious financial troubles down the track.
A lot of us get comfortable with our lifestyles – our car, our home, our work – and forget that things can in fact go wrong and every person needs some financial cushioning for rainy days. Without any savings in the bank, what will cover 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 take out a short-term, high interest loan which will only intensify the issue – you can’t save any cash presently so how will you pay back an added expense? While it’s easy to neglect, having no savings is a recipe for disaster and you should act 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 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 suggests a lack of care and appreciation for your hard-earned cash, and can evidently trigger financial problems in the future. Try making a budget and actively complying with it. This will aid you in having a greater awareness of your finances so you can understand how much of your money is being wasted on needless items. After a month or so, reward yourself for sticking to your budget and you’ll enjoy 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, particularly credit cards, then you’re heading for financial troubles. It can take years, even decades, to erase a credit card debt by only making minimum repayments. In the meantime, interest charges will be eating away all your potential savings while you’re virtually just treading water. If this seems familiar, it’s time to make a change and quickly. You ought to get your priorities right by making a plan, sticking to a budget, and saving as much money as possible to pay off your remaining debts.
Spending more than you earn
The clearest sign of money problems is where your spending overtakes your income. Even when you have a substantial savings account, you must always ensure that your income is higher than your expenses, it’s just basic maths really. If you get into a bad habit of spending too much, it can become addictive and lead to even more issues, in addition to probable financial difficulties. Certain people try to mask 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 earnings is greater than your spending? If you’re unsure, it’s perhaps a good time to find out and make some modifications.
You have new clothes in your wardrobe that you don’t wear
A practical way to assess if you have money issues is to search through your wardrobe. Do you have clothes that still have the price tag on them? Everybody loves a sale, and it’s a great way to save money when cash is tight and you’re in need of something. But purchasing clothes solely because they’re on sale may suggest that you have money problems. If this is the case, you may additionally be inclined to buy other items simply because they’re on sale too. Purchasing unneeded items under the impression that you’re saving money is something that needs to be fixed.
Regardless of 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 potential complications 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 hit and you’ll be pulled into the financial abyss. To find out what options you have, or to speak with someone about your finances, get in touch with Bankruptcy Experts Bendigo on 1300 795 575 or visit http://www.bankruptcyexpertsBendigo.com.au