Everybody loves money, particularly spending it! Buying new toys or new clothes which make you look and feel great is important for your confidence and self-esteem. But how do you know if you’re good with money or not? Just because you get paid plenty of money doesn’t imply you’re good with it. There are a lot of successful people who have huge problems with money solely because they weren’t familiar with the warning signs. In this day and age, it’s critical to be money conscious so here are five signs that you might have problems with money which can ultimately cause serious financial issues in the future.
Many of us get comfortable with our lifestyles – our car, our home, our jobs – and forget that things can in fact go wrong and every person needs some financial cushioning for rainy days. Without having any savings in the bank, what will protect you from incidents 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 lot of trouble. You’ll need to take out a short-term, high interest loan which will only exacerbate the problem – you can’t save any cash presently so how will you repay an added expense? Although it’s easy to overlook, having no savings is a recipe for disaster and you should act now before it’s too late. The majority of financial advisors recommend 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 you receive, and where it goes when you spend it. If you don’t know where your money is being spent, it reveals a lack of care and respect for your hard-earned cash, and can surely cause financial issues in the future. Try creating a budget and actively following it. This will assist you in having a better awareness of your finances so you can comprehend how much of your money is being squandered on nonessential items. After a month or so, reward yourself for sticking to your budget and you’ll appreciate 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, in particular credit cards, then you’re heading for financial troubles. It can take many years, even decades, to get rid of a credit card debt by only making minimum repayments. Meanwhile, interest fees will be eating away all your prospective savings while you’re basically just treading water. If this sounds familiar, it’s time to make a change and quickly. You have to get your priorities straight by creating a plan, sticking to a budget, and saving as much money as possible to settle your pending debts.
Spending more than you earn
The biggest sign of money troubles is where your spending eclipses your income. Even when you have a comfortable savings account, you must always ensure that your earnings is greater than your expenses, it’s just simple maths really. If you get into a bad habit of spending too much, it can come to be addictive and cause even more issues, on top of likely financial difficulties. Certain people attempt to mask this problem by paying bills with their credit cards which simply makes the problem worse in the long-term. Do you even know if your earnings is higher than your spending? If you’re uncertain, it’s perhaps a good time to find out and make some adjustments.
You have new clothes in your wardrobe that you don’t use
A simple way to check if you have money issues is to search through your wardrobe. Do you have clothes that still have the tag on them? Everybody 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 just because they’re on sale may signal that you have money troubles. If this is the case, you may additionally be inclined to purchase other items purely because they’re on sale too. Buying unnecessary items under the impression that you’re saving money is something that has to be corrected.
Irrespective of how much you get paid, if you’re not good with money then now is the time to adjust your habits to stay away from potential complications 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 drawn into the financial abyss. To find out what options you have, or to speak with someone about your finances, contact Bankruptcy Experts Gladstone on 1300 795 575 or visit http://www.bankruptcyexpertsgladstone.com.au