Signs You Could Be Having Money Problems
Everyone loves money, particularly spending it! Buying new toys or new clothes that make you look and feel 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 indicate you’re good with it. There are loads of successful people who have significant issues with money simply because they weren’t familiar with the warning signs. In this day and age, it’s essential to be money conscious so here are five signs that you might have issues with money which can subsequently bring about serious financial problems down the track.
Most of us get comfortable with our lifestyles – our car, our house, our profession – and forget that things can in fact go wrong and everybody needs some financial protection for rainy days. Without having any savings in the bank, what will cover 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 need to get a short-term, high interest loan which will only compound the problem – you can’t save any money now so how will you repay an additional expense? Even though it’s easy to overlook, having no savings is a recipe for disaster and you should take action now before it’s too late. Most 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 you receive, and where it goes when you spend it. If you don’t know where your money is being spent, it indicates a lack of care and appreciation for your hard-earned cash, and can surely bring about financial issues in the near future. Try creating a budget and actively adhering to it. This will aid you in having a better understanding of your finances so you can recognise 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 value 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, 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. In the meantime, 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 ought to get your priorities straight by making a plan, adhering to a budget, and saving as much money as possible to settle your remaining debts.
Spending more than you earn
The biggest sign of money troubles is where your spending eclipses your earnings. Even when you have a comfortable savings account, you should always make sure that your income is greater than your expenses, it’s just simple maths really. If you find yourself in a bad habit of spending excessively, it can become addictive and lead to even more issues, on top of potential financial difficulties. Certain people attempt to mask this problem by paying bills with their credit cards which basically makes the situation worse in the long run. Do you even know if your earnings is more than your spending? If you’re uncertain, it’s probably 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 assess if you have money issues is to take a look in your wardrobe. Do you have clothes that still have the 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 buying clothes just because they’re on sale may reveal that you have money issues. If this is the case, you may additionally be inclined to buy other items just because they’re on sale too. Buying nonessential items under the perception that you’re saving money is something that has to be addressed.
Despite 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 problems 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 talk with someone about your finances, contact Bankruptcy Experts Melbourne on 1300 795 575 or visit http://www.bankruptcyexpertsmelbourne.com.au