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 heaps of money doesn’t indicate you’re good with it. There are a lot of successful individuals who have big problems with money just because they weren’t familiar with the warning signs. In today’s world, it’s imperative to be money conscious so here are 5 signs that you may have issues with money which can eventually result in serious financial issues down the track.
Many of us get complacent with our lifestyles – our car, our home, our jobs – and forget that things can certainly go wrong and everyone needs some financial cushioning for rainy days. Without any savings in the bank, what will protect you from events such as 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 need to get a short-term, high interest loan which will only magnify the issue – you can’t save any money now 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 act 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 don’t know where your money goes
Being good with money means that you know when and how much money you receive, and where it goes when you spend it. If you have no idea where your money is being spent, it suggests a lack of care and appreciation for your hard-earned cash, and can certainly lead to financial issues down the track. Try creating a budget and actively following it. This will assist you in having a greater awareness of your finances so you can comprehend how much of your money is being wasted on nonessential items. After a month or so, reward yourself for sticking to your budget and you’ll appreciate 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, in particular credit cards, then you’re heading for financial problems. It can take many years, even decades, to clear a credit card debt by only making minimum repayments. Meanwhile, interest rates will be eating away all your potential savings while you’re ultimately just treading water. If this seems 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 repay your ongoing debts.
Spending more than you earn
The biggest sign of money troubles is where your spending eclipses your earnings. Even if you have a substantial savings account, you must always ensure that your income is higher than your expenses, it’s just simple maths really. If you get into a bad habit of spending too much, it can come to be addictive and create even more issues, on top of likely financial difficulties. A number of people attempt to disguise this problem by paying bills with their credit cards which only makes the problem worse in the long run. Do you even know if your earnings is more than your spending? If you’re not sure, it’s definitely a good time to find out and make some adjustments.
You have new clothes in your wardrobe that you don’t use
A practical 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? 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 buying clothes only because they’re on sale may reveal that you have money issues. If this is the case, you may additionally be inclined to purchase other items purely because they’re on sale too. Buying nonessential items under the impression that you’re saving money is something that needs to be corrected.
Irrespective of how much you get paid, if you’re not good with money then now is the time to adjust your habits to prevent potential complications in the future. If any of these warning signs sound familiar to you, it may signal 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 drawn into the financial abyss. To find out what options you have, or to speak to someone about your finances, get in touch with Bankruptcy Experts Mackay on 1300 795 575 or visit http://www.bankruptcyexpertsmackay.com.au