Everyone loves money, especially spending it! Getting new toys or new clothes which make you feel and look great 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 loads of successful people who have huge issues with money simply because they weren’t familiar with the warning signs. In today’s world, it’s critical to be money conscious so here are 5 signs that you could have issues with money which can eventually result in serious financial problems in the future.
You don’t have any savings
Many of us get comfortable with our lifestyles – our car, our home, our profession – and forget that things can actually go wrong and everybody needs some financial insulation for rainy days. Without having 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 have to apply for a short-term, high interest loan which will only intensify the issue – you can’t save any money currently so how will you pay off an added expense? Though it’s easy to overlook, having no savings is a recipe for disaster and you should take action 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 suggests a lack of care and respect for your hard-earned cash, and can surely trigger financial problems in the near future. Try creating a budget and actively abiding by it. This will aid you in having a better knowledge of your finances so you can recognise how much of your money is being eaten away on unneeded items. After a month or so, reward yourself for sticking to your budget and you’ll appreciate spending money on yourself a whole lot more.
Making minimum repayments only
If you can only manage to make the minimum repayments on your loans, specifically 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. Meanwhile, interest rates 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 pay off your remaining 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 more 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 create even more issues, on top of probable financial difficulties. Some people try to mask this problem by paying bills with their credit cards which basically makes the situation worse in the long-term. Do you even know if your earnings is greater than your spending? If you’re not sure, it’s probably a good time to find out and make some changes.
You have new clothes in your wardrobe that you don’t wear
An easy way to assess if you have money issues is to search through your wardrobe. Do you have clothes that still have the tag on them? Everybody loves a sale, and it’s a great way to save money when cash is tight and you need something. But purchasing clothes purely because they’re on sale may indicate that you have money troubles. If this is the case, you may also be inclined to purchase other items simply 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 modify your habits to steer clear of potential issues 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 blow and you’ll be drawn into the financial abyss. To find out what options you have, or to talk with someone about your finances, get in touch with Bankruptcy Experts Port Stephens on 1300 795 575 or visit http://www.bankruptcyexpertsportstephens.com.au