Everybody loves money, particularly spending it! Getting new toys or new clothes which make you feel and look great 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 plenty of money doesn’t imply you’re good with it. There are plenty of successful people who have huge problems with money just because they weren’t familiar with the warning signs. Today, it’s important to be money conscious so here are 5 signs that you could have issues with money which can gradually trigger serious financial issues in the future.
You don’t have any savings
Many of us get complacent with our lifestyles – our car, our home, our profession – and forget that things can certainly go wrong and everybody needs some financial protection for rainy days. Without 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 world of pain. You’ll have to take out a short-term, high interest loan which will only magnify the issue – you can’t save any cash presently so how will you repay an extra expense? Though it’s easy to neglect, having no savings is a recipe for disaster and you should act now before it’s too late. The majority of financial advisors suggest 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 signals a lack of care and respect for your hard-earned cash, and can clearly bring about financial problems in the future. Try creating a budget and actively abiding by it. This will help you in having a better awareness of your finances so you can understand how much of your money is being squandered on unnecessary items. After a month or so, reward yourself for sticking to your budget and you’ll value spending money on yourself a lot 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 problems. It can take many years, even decades, to erase a credit card debt by only making minimum repayments. In the meantime, interest charges will be eating away all your prospective savings while you’re virtually just treading water. If this sounds familiar, it’s time to make a change and quickly. You ought to get your priorities straight by making a plan, sticking to a budget, and saving as much money as possible to repay 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 substantial savings account, you should always ensure that your income is more than your expenses, it’s just basic maths really. If you find yourself in a bad habit of spending too much, it can come to be addictive and bring about even more issues, on top of probable financial difficulties. Many people try to disguise this problem by paying bills with their credit cards which basically makes the issue worse in the long-term. Do you even know if your earnings is higher than your spending? If you’re unsure, it’s definitely 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 look in your wardrobe. Do you have clothes that still have the tag on them? Almost everyone loves a sale, and it’s an excellent 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 illustrate that you have money troubles. If this is the case, you may similarly 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 needs to be amended.
Despite how much you get paid, if you’re not good with money then now is the time to modify your habits to steer clear of possible 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 talk with someone about your finances, reach out to Bankruptcy Australia on 1300 795 575 or visit http://www.bankruptcy-australia.net.au