Everyone loves money, particularly spending it! Getting new toys or new clothes which make you look and feel 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 lots of money doesn’t mean you’re good with it. There are loads of successful individuals who have serious issues with money simply because they weren’t aware of the warning signs. Today, it’s crucial 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.
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 in fact go wrong and everyone needs some financial protection for rainy days. Without any savings in the bank, what will cover you from events like 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 lot of trouble. You’ll need to get a short-term, high interest loan which will just compound the problem – you can’t save any cash now so how will you pay back an added expense? Even though it’s easy to overlook, having no savings is a recipe for disaster and you should act now before it’s too late. Most financial advisors strongly recommend 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 comes in, and where it goes when you spend it. If you have no idea where your money is being spent, it signifies a lack of care and appreciation for your hard-earned cash, and can clearly cause financial issues before you know it. Try making a budget and actively abiding by it. This will assist you in having a greater appreciation of your finances so you can realise how much of your money is being eaten away on nonessential 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, particularly credit cards, then you’re heading for financial problems. It can take many years, even decades, to get rid of a credit card debt by only making minimum repayments. Meanwhile, interest charges will be eating away all your potential savings while you’re ultimately 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 pay off your remaining debts.
Spending more than you earn
The most evident sign of money issues is where your spending eclipses your income. Even when you have a comfortable savings account, you should always make sure that your earnings is higher 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 bring about even more issues, on top of potential financial difficulties. Certain people attempt to disguise this problem by paying bills with their credit cards which simply makes the situation worse in the long run. Do you even know if your income is greater than your spending? If you’re unsure, it’s perhaps a good time to find out and make some improvements.
You have new clothes in your wardrobe that you don’t wear
A basic way to check if you have money issues is to look in your wardrobe. Do you have clothes that still have the price tag on them? 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 purchasing clothes purely because they’re on sale may signal that you have money issues. If this is the case, you may additionally be inclined to buy other items purely because they’re on sale too. Buying nonessential items under the perception that you’re saving money is something that needs to be remedied.
Regardless of how much you get paid, if you’re not good with money then now is the time to adjust your habits to steer clear of potential issues in the future. If any of these warning signs sound familiar to you, it may suggest 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 talk with someone about your finances, contact Gold Coast Bankruptcy Centre on 1300 795 575 or visit http://www.goldcoastbankruptcycentre.com.au