Everyone loves money, especially spending it! Getting new toys or new clothes which 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 mean you’re good with it. There are plenty of successful individuals who have significant problems with money solely because they weren’t aware of the warning signs. In this day and age, it’s necessary to be money conscious so here are 5 signs that you could have issues with money which can eventually lead to serious financial issues down the track.
A lot of us get complacent with our lifestyles – our car, our house, our jobs – and forget that things can certainly go wrong and everybody 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 hit and you’ll be in a world of pain. You’ll have to get a short-term, high interest loan which will only magnify the issue – you can’t save any money currently so how will you pay back an added expense? While it’s easy to neglect, having no savings is a recipe for disaster and you should act 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 don’t know where your money is being spent, it indicates a lack of care and respect for your hard-earned cash, and can certainly cause financial issues down the track. Try making a budget and actively abiding by it. This will help you in having a greater understanding of your finances so you can realise how much of your money is being eaten away on needless items. After a month or so, reward yourself for sticking to your budget and you’ll enjoy spending money on yourself a great deal 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 clear a credit card debt by only making minimum repayments. In the meantime, interest payments will be eating away all your potential savings while you’re virtually just treading water. If this sounds familiar, it’s time to make a change and quickly. You have to get your priorities straight by creating a plan, following 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 troubles is where your spending surpasses your income. Even if you have a healthy savings account, you must always ensure that your earnings is more than your expenses, it’s just basic maths really. If you get into a bad habit of spending way too much, it can come to be addictive and lead to even more issues, on top of potential financial difficulties. Certain people attempt to mask this problem by paying bills with their credit cards which just makes the situation worse in the long-term. Do you even know if your income is higher than your spending? If you’re not sure, it’s perhaps a good time to find out and make some modifications.
You have new clothes in your wardrobe that you don’t wear
An easy way to assess if you have money problems 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 a great way to save money when cash is tight and you’re in need of something. But buying clothes just because they’re on sale may indicate that you have money troubles. If this is the case, you may similarly be inclined to buy 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.
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 clear of 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 pulled 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 Lismore on 1300 795 575 or visit http://www.bankruptcyexpertslismore.com.au