Everyone loves money, particularly spending it! Buying new toys or new clothes that make you look and feel good is important for your confidence and self-esteem. Yet how do you know if you’re good with money or not? Even if you get paid heaps of money doesn’t indicate you’re good with it. There are loads of successful people who have big issues with money simply because they weren’t aware of the warning signs. Today, it’s crucial to be money conscious so here are 5 signs that you could have issues with money which can inevitably lead to serious financial issues down the track.
You don’t have any savings
Most 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 insulation for rainy days. Without any savings in the bank, what will protect you from events 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 world of pain. 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 pay off an additional expense? Even though it’s easy to ignore, having no savings is a recipe for disaster and you should take action now before it’s too late. Most 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 indicates a lack of care and respect for your hard-earned cash, and can surely cause financial problems in the near future. Try creating a budget and actively abiding by it. This will assist you in having a greater understanding of your finances so you can recognise 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 value spending money on yourself a great deal more.
Making minimum repayments only
If you can only afford to make the minimum repayments on your loans, specifically credit cards, then you’re heading for financial troubles. It can take 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 potential savings while you’re virtually just treading water. If this seems familiar, it’s time to make a change and quickly. You need to get your priorities straight by creating a plan, sticking to a budget, and saving as much money as possible to repay your ongoing debts.
Spending more than you earn
The clearest sign of money problems is where your spending surpasses your income. Whether or not you have a substantial savings account, you must always make sure that your income is more than your expenses, it’s just simple maths really. If you find yourself in a bad habit of spending far too much, it can become addictive and bring about even more issues, in addition to probable financial difficulties. Some people attempt to mask this problem by paying bills with their credit cards which merely makes the situation worse in the long-term. Do you even know if your income is more than your spending? If you’re unsure, it’s certainly a good time to find out and make some adjustments.
You have new clothes in your wardrobe that you don’t wear
A basic way to assess 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 an excellent way to save money when cash is tight and you need something. But purchasing clothes simply because they’re on sale may indicate that you have money problems. If this is the case, you may also 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 ought to be fixed.
Irrespective of how much you get paid, if you’re not good with money then now is the time to adjust your habits to avoid possible problems 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, contact Bankruptcy Experts Gympie on 1300 795 575 or visit http://www.bankruptcyexpertsgympie.com.au