Everyone loves money, especially spending it! Getting new toys or new clothes that make you feel and look 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 heaps of money doesn’t suggest you’re good with it. There are lots of successful individuals who have big issues with money solely because they weren’t aware of the warning signs. In today’s world, it’s critical to be money conscious so here are 5 signs that you might have issues with money which can subsequently cause serious financial troubles down the track.
Many of us get complacent with our lifestyles – our car, our home, our work – and forget that things can actually go wrong and everyone needs some financial cushioning 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 world of pain. You’ll need to take out 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 an extra expense? Though 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 strongly 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 have no idea where your money is being spent, it shows a lack of care and respect for your hard-earned cash, and can surely result in financial complications in the near future. Try creating a budget and actively adhering to it. This will help you in having a better appreciation of your finances so you can understand how much of your money is being wasted on unnecessary items. After a month or so, reward yourself for sticking to your budget and you’ll enjoy spending money on yourself a lot 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 years, even decades, to get rid of a credit card debt by only making minimum repayments. Meanwhile, interest payments 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 right by creating a plan, sticking to a budget, and saving as much money as possible to settle your outstanding debts.
Spending more than you earn
The biggest sign of money issues is where your spending overtakes your income. Even when you have a healthy savings account, you must always make sure that your income is higher than your expenses, it’s just simple maths really. If you find yourself in a bad habit of spending way too much, it can come to be addictive and lead to even more issues, in addition to likely financial difficulties. Certain people try 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 earnings is higher than your spending? If you’re uncertain, it’s perhaps a good time to find out and make some changes.
You have new clothes in your wardrobe that you don’t use
A practical way to check if you have money issues 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’re in need of something. But purchasing clothes simply because they’re on sale may signify that you have money problems. If this is the case, you may also be inclined to purchase other items just because they’re on sale too. Purchasing nonessential items under the impression that you’re saving money is something that should be amended.
Irrespective of how much you get paid, if you’re not good with money then now is the time to adjust your habits to stay away from potential issues 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 pulled into the financial abyss. To find out what options you have, or to talk to someone about your finances, reach out to Bankruptcy Experts Sunshine Coast on 1300 795 575 or visit http://www.bankruptcyexpertssunshinecoast.com.au