Signs You Could Be Having Money Issues
Everyone loves money, especially spending it! Getting new toys or new clothes which 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 imply you’re good with it. There are plenty of successful people who have huge issues with money just because they weren’t aware of the warning signs. Today, it’s very important to be money conscious so here are 5 signs that you could have issues with money which can ultimately lead to serious financial issues in the future.
You don’t have any savings
Most of us get complacent with our lifestyles – our car, our home, our work – and forget that things can actually go wrong and everyone needs some financial protection 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 hit and you’ll be in a lot of trouble. You’ll need to get a short-term, high interest loan which will just compound the issue – you can’t save any money currently so how will you repay an additional expense? Although it’s easy to neglect, having no savings is a recipe for disaster and you should take action now before it’s too late. The majority of financial advisors advise having three to six months of living expenses in an emergency fund.
You have no idea 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 respect for your hard-earned cash, and can clearly lead to financial issues before you know it. Try creating a budget and actively adhering to it. This will help you in having a greater understanding of your finances so you can recognise 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 enjoy spending money on yourself a lot more.
Making minimum repayments only
If you can only manage to make the minimum repayments on your loans, in particular credit cards, then you’re heading for financial problems. It can take many years, even decades, to get rid of a credit card debt by only making minimum repayments. Meanwhile, interest charges will be eating away all your prospective savings while you’re essentially just treading water. If this seems familiar, it’s time to make a change and quickly. You have to get your priorities right by creating a plan, adhering to a budget, and saving as much money as possible to settle your remaining debts.
Spending more than you earn
The clearest sign of money problems is where your spending surpasses your earnings. Even if you have a healthy savings account, you must always ensure that your earnings is higher than your expenses, it’s just basic maths really. If you get into a bad habit of spending far too much, it can become addictive and trigger even more issues, on top of likely financial difficulties. Some people try to mask this problem by paying bills with their credit cards which merely makes the problem worse in the long run. Do you even know if your earnings is greater than your spending? If you’re uncertain, 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 useful way to assess if you have money problems is to look in your wardrobe. Do you have clothes that still have the price tag on them? Almost everyone loves a sale, and it’s a good 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 issues. If this is the case, you may similarly be inclined to buy other items simply because they’re on sale too. Buying nonessential items under the impression that you’re saving money is something that needs to be amended.
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 possible issues in the future. If any of these warning signs sound familiar to you, it may indicate 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 pulled into the financial abyss. To find out what options you have, or to speak to someone about your finances, contact Bankruptcy Experts Tamworth on 1300 795 575 or visit http://www.bankruptcyexpertstamworth.com.au