Signs You Could Be Having Money Issues
Everybody loves money, especially spending it! Getting 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 a lot of money doesn’t indicate you’re good with it. There are plenty of successful individuals who have significant issues with money purely because they weren’t familiar with the warning signs. In today’s world, it’s paramount to be money conscious so here are 5 signs that you could have issues with money which can subsequently lead to serious financial troubles down the track.
Most of us get complacent with our lifestyles – our car, our house, our work – and forget that things can actually go wrong and everyone needs some financial insulation 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 blow and you’ll be in a lot of trouble. You’ll have to take out a short-term, high interest loan which will just intensify the issue – you can’t save any money presently so how will you pay back a further expense? 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. 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 don’t know where your money is being spent, it signifies a lack of care and appreciation for your hard-earned cash, and can unquestionably trigger financial complications before you know it. Try making a budget and actively abiding by it. This will aid you in having a greater awareness 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 enjoy spending money on yourself a great deal more.
Making minimum repayments only
If you can only manage to make the minimum repayments on your loans, particularly 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 payments will be eating away all your potential savings while you’re essentially just treading water. If this seems familiar, it’s time to make a change and quickly. You ought to get your priorities right by creating a plan, sticking to a budget, and saving as much money as possible to pay off your outstanding debts.
Spending more than you earn
The most evident sign of money issues is where your spending eclipses your earnings. Regardless of whether you have a healthy savings account, you should 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 excessively, it can come to be addictive and create even more issues, in addition to potential financial difficulties. Many 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 more than your spending? If you’re uncertain, it’s perhaps a good time to find out and make some modifications.
You have new clothes in your wardrobe that you don’t use
A practical way to assess if you have money problems 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 nice way to save money when cash is tight and you need something. But buying clothes purely because they’re on sale may reveal that you have money problems. If this is the case, you may similarly be inclined to purchase other items simply because they’re on sale too. Purchasing unneeded items under the perception that you’re saving money is something that ought to be corrected.
Despite how much you get paid, if you’re not good with money then now is the time to change your habits to steer clear of potential 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 with someone about your finances, reach out to Bankruptcy Experts Joondalup on 1300 795 575 or visit http://www.bankruptcyexpertsjoondalup.com.au