10 Signs You Might Have A Financial Problem
The way you spend your money and think about your assets is a strong indicator of your attitude towards saving and increasing your later financial security. Stop and think about the decisions you’ve been making lately, from the morning coffee you paid for down to your regular electricity bill. How do you think about what to do with your money? Have a look at these ten warnings that you may be on the wrong track regarding your finances—check yourself before you wreck yourself!
- Having more than two credit cards
Credit cars serve the valuable purpose of being a portable, ready source of payment for big purchases—but why do you need three or four cards for everything? Remember that each card has corresponding fees, and that it is specifically for credit—you will have to pay what you spend back, which will put a dent in your existing savings and later income. Cut down on the plastic before your debt spirals out of control!
- Paying for everything—even small, day to day items—with your credit card
On that note, if you’re paying for small things like a quick stop to the grocery for a few items with a credit card, you’re not keeping enough ready cash on hand—or worse, you don’t have any ready cash on hand at all. As noted in our previous problem, your debt will accumulate even on those trivial purchases over time. Be prudent and monitor even your small expenses.
- Forgetting to pay your bills on time
Late payments will result in penalty charges—more money out of your pocket, which you could have saved if you had only tracked the due dates for the water, electricity and other things. Be mindful of these pending financial obligations, because unpaid bills will result in stoppage of service and mounting debts.
- Not having emergency savings
Everyone should put away a little bit from their regular paycheck. If you don’t have emergency savings, you’ll find yourself in a world of trouble when you need to shell out money for the hospital, or suddenly have to pay off an accidental expense. Prepare for those rainy days and accumulate at least three to six months’ worth of salaries as an emergency fund.
- Ignoring financial documents
Bills, your checkbook, any loan applications…why won’t you take the time to read the fine print or open the envelopes, especially when you know that ignoring them will lead to serious monetary consequences? If you’re afraid of facing debt payments, bite the bullet and ask for help from a financial planner—the longer you put it off, the worse it gets.
- Being turned down for a loan
Banks are wary of lending to people who don’t at least stand a reasonable chance of being able to pay them back, so if you are often rejected for loans, it’s because they’ve assessed you as a financial liability. Check for any items still on installment payments, unpaid rents, credit issues or other monetary obligations which make it difficult to obtain a loan.
- Not having a personal budget
Not knowing how much you should allocate for your needs—food, rent, utilities and luxuries, among others—is a serious problem. If you don’t have a budget, you don’t know how much to allocate for what you really need and how to save for what you want, which may lead you to come up short for the things that count.
- Fighting with family or friends about money
People are most likely to fight about money when there isn’t enough of it. Have you been borrowing from your buddies? Is your spouse angry because you’re not shouldering the expenses properly, or you’re spending too much? Chances are, if money is a problem with your relationships, you owe someone. Pay off all debts as soon as possible—don’t strain your ties because you can’t manage your cashflow.
- Pawning off possessions
This is a very clear indicator that there is a problem. If you’re off to the pawnshop for quick and easy cash on your beloved watch or musical instrument, you’ve reached the end of the line and have no ready source of money, or have a lot of debts. Seek financial assistance immediately!
- Hiding purchases from your family
If you’re tucking away those shopping bags, you’re ashamed—and that’s probably because you’re spending on things you don’t really need. Keep all your receipts, be mindful of what you buy, and stop hiding your shiny new toy. The guilt is meant to curb your appetite for spending all the time!