Signs You Could Be Having Money Issues
Everyone loves money, especially spending it! Getting 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 lots of money doesn’t suggest you’re good with it. There are a lot of successful people who have significant issues with money solely because they weren’t aware of the warning signs. In today’s world, it’s critical to be money conscious so here are 5 signs that you could have issues with money which can ultimately result in serious financial problems down the track.
A lot of us get complacent with our lifestyles – our car, our house, our work – and forget that things can actually go wrong and everybody needs some financial cushioning for rainy days. Without having any savings in the bank, what will protect you from incidents like 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 lot of trouble. You’ll need to get a short-term, high interest loan which will only compound the issue – you can’t save any money now so how will you repay an additional expense? Whilst it’s easy to neglect, having no savings is a recipe for disaster and you should take action now before it’s too late. Most 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 you receive, and where it goes when you spend it. If you have no idea where your money is being spent, it reveals a lack of care and respect for your hard-earned cash, and can clearly lead to financial issues down the track. Try making a budget and actively abiding by it. This will support you in having a better awareness of your finances so you can realise how much of your money is being wasted on nonessential items. After a month or so, reward yourself for sticking to your budget and you’ll value spending money on yourself a 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 many years, even decades, to erase a credit card debt by only making minimum repayments. Meanwhile, interest rates will be eating away all your potential savings while you’re basically just treading water. If this sounds familiar, it’s time to make a change and quickly. You ought 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 clearest sign of money problems is where your spending overtakes your earnings. Even when you have a healthy savings account, you must always ensure that your income is higher than your expenses, it’s just simple maths really. If you find yourself in a bad habit of spending way too much, it can become addictive and result in 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 problem worse in the long-term. Do you even know if your income is higher than your spending? If you’re unsure, it’s perhaps a good time to find out and make some changes.
You have new clothes in your wardrobe that you don’t use
A simple 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? Almost everyone loves a sale, and it’s an excellent way to save money when cash is tight and you need something. But buying clothes only because they’re on sale may signify that you have money troubles. If this is the case, you may similarly be inclined to purchase other items simply because they’re on sale too. Buying unnecessary items under the impression that you’re saving money is something that should be addressed.
Regardless of how much you get paid, if you’re not good with money then now is the time to modify your habits to avoid possible 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 sucked into the financial abyss. To find out what options you have, or to speak to someone about your finances, get in touch with Bankruptcy Experts Geelong on 1300 795 575 or visit http://www.bankruptcyexpertsgeelong.com.au