Signs You Could Be Having Money Problems
Everyone loves money, especially spending it! Getting new toys or new clothes which 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 plenty of money doesn’t mean you’re good with it. There are a lot of successful people who have huge problems with money just because they weren’t familiar with the warning signs. Today, it’s crucial to be money conscious so here are 5 signs that you may have problems with money which can ultimately trigger serious financial problems in the future.
You don’t have any savings
Most of us get complacent with our lifestyles – our car, our house, our work – and forget that things can in fact go wrong and everybody needs some financial cushioning for rainy days. Without any savings in the bank, what will protect you from events 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 have to apply for a short-term, high interest loan which will only exacerbate the problem – you can’t save any cash now so how will you pay off an extra expense? Even though it’s easy to ignore, having no savings is a recipe for disaster and you should act now before it’s too late. The majority of financial advisors suggest 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 shows a lack of care and appreciation for your hard-earned cash, and can unquestionably cause financial complications in the near future. Try making a budget and actively abiding by it. This will support you in having a greater knowledge of your finances so you can understand 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 value 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 problems. It can take many years, even decades, to erase a credit card debt by only making minimum repayments. Meanwhile, interest payments 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 need to get your priorities straight by creating a plan, sticking to 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 problems is where your spending overtakes your earnings. Whether or not you have a comfortable savings account, you must always make sure 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 cause even more issues, in addition to potential financial difficulties. A number of people attempt to disguise this problem by paying bills with their credit cards which simply makes the issue worse in the long-term. Do you even know if your income is more than your spending? If you’re unsure, it’s certainly a good time to find out and make some adjustments.
You have new clothes in your wardrobe that you don’t wear
A practical way to assess if you have money problems 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 nice way to save money when cash is tight and you’re in need of something. But purchasing clothes just because they’re on sale may reveal that you have money troubles. If this is the case, you may additionally be inclined to buy other items just because they’re on sale too. Buying unneeded items under the perception that you’re saving money is something that has to be amended.
Despite how much you get paid, if you’re not good with money then now is the time to adjust your habits to prevent possible problems in the future. If any of these warning signs sound familiar to you, it may signify 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 with someone about your finances, contact Bankruptcy Experts Sydney on 1300 795 575 or visit http://www.bankruptcyexpertssydney.com.au