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 suggest you’re good with it. There are lots of successful people who have significant problems with money just because they weren’t aware of the warning signs. Today, it’s essential to be money conscious so here are 5 signs that you may have issues with money which can eventually cause serious financial issues down the track.
A lot of us get complacent with our lifestyles – our car, our house, our work – and forget that things can actually go wrong and everybody needs some financial cushioning for rainy days. Without having any savings in the bank, what will cover you from events 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 take out a short-term, high interest loan which will just magnify the issue – you can’t save any money presently so how will you repay 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 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 comes in, and where it goes when you spend it. If you don’t know where your money is being spent, it shows a lack of care and respect for your hard-earned cash, and can naturally bring about financial problems down the track. Try creating a budget and actively following it. This will support you in having a better appreciation of your finances so you can understand how much of your money is being drained on unneeded 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, especially credit cards, then you’re heading for financial troubles. It can take years, even decades, to erase a credit card debt by only making minimum repayments. Meanwhile, interest charges will be eating away all your potential savings while you’re effectively just treading water. If this sounds familiar, it’s time to make a change and quickly. You ought to get your priorities straight by creating a plan, following a budget, and saving as much money as possible to pay off your ongoing debts.
Spending more than you earn
The biggest sign of money troubles is where your spending surpasses your earnings. Even if you have a substantial savings account, you must 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 too much, it can become addictive and cause even more issues, on top of probable financial difficulties. Certain people attempt to mask this problem by paying bills with their credit cards which merely makes the issue worse in the long run. Do you even know if your income is higher than your spending? If you’re uncertain, it’s certainly a good time to find out and make some modifications.
You have new clothes in your wardrobe that you don’t wear
A practical way to check if you have money problems is to take a look in your wardrobe. Do you have clothes that still have the price 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 buying clothes just because they’re on sale may suggest that you have money issues. If this is the case, you may additionally be inclined to purchase other items just because they’re on sale too. Buying unnecessary items under the perception that you’re saving money is something that must be corrected.
Regardless of 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 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 sucked into the financial abyss. To find out what options you have, or to speak to someone about your finances, reach out to Bankruptcy Experts Townsville on 1300 795 575 or visit http://www.bankruptcyexpertstownsville.com.au