|May 29, 2017||Comments Closed|
Everyone loves money, especially 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? Just because you get paid lots of money doesn’t imply you’re good with it. There are loads of successful individuals who have significant problems with money solely because they weren’t aware of the warning signs. In this day and age, it’s imperative to be money conscious so here are 5 signs that you might have issues with money which can ultimately bring about serious financial troubles down the track.
Many of us get complacent with our lifestyles – our car, our house, our work – and forget that things can actually go wrong and every person needs some financial cushioning for rainy days. Without 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 hit and you’ll be in a world of pain. You’ll have to apply for a short-term, high interest loan which will only intensify the problem – you can’t save any cash now so how will you pay off a further expense? While 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 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 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 obviously lead to financial issues before you know it. Try creating a budget and actively following it. This will assist you in having a greater understanding of your finances so you can comprehend 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, in particular credit cards, then you’re heading for financial troubles. It can take many years, even decades, to clear a credit card debt by only making minimum repayments. In the meantime, interest rates will be eating away all your potential savings while you’re ultimately just treading water. If this seems familiar, it’s time to make a change and quickly. You ought to get your priorities straight by creating a plan, adhering to a budget, and saving as much money as possible to pay off your remaining debts.
Spending more than you earn
The most evident sign of money troubles is where your spending surpasses your income. Whether or not you have a healthy savings account, you should always make sure that your earnings is more than your expenses, it’s just basic maths really. If you get into a bad habit of spending excessively, it can come to be addictive and lead to even more issues, in addition to probable financial difficulties. A number of people attempt to disguise this problem by paying bills with their credit cards which basically makes the problem worse in the long run. Do you even know if your income is more than your spending? If you’re not sure, it’s perhaps 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 evaluate if you have money issues is to take a look in your wardrobe. Do you have clothes that still have the tag on them? Everyone loves a sale, and it’s a good way to save money when cash is tight and you need something. But purchasing clothes purely because they’re on sale may illustrate that you have money troubles. If this is the case, you may also 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 ought to be remedied.
Despite how much you get paid, if you’re not good with money then now is the time to modify your habits to prevent potential 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 hit and you’ll be pulled into the financial abyss. To find out what options you have, or to speak with someone about your finances, reach out to Bankruptcy Experts Ipswich on 1300 795 575 or visit http://www.bankruptcyexpertsipswich.com.au