1. You aren’t paying off your credit card balance each month, or your credit cards are maxed out
This suggests you are living outside of your means. It may be time to see a financial planner and work out a better way to manage your credit card debt, such as consolidating it.
2. You can’t stick to a budget
In order to be in control of your finances, you need to know exactly how much money you are spending on essentials and non-essentials. Additionally, it’s very difficult to go cold turkey and stick to a frugal budget straight away. Analyse your financial commitments and bucket your money into different accounts: one for paying essential costs, one for savings, one for discretionary spending.
3. You aren’t putting any money into savings
It’s essential that everyone have some sort of financial buffer, so that should you be faced with job loss or sickness, you aren’t immediately plunged below the poverty line. Aim for an emergency fund that can cover up to three months’ worth of essential costs, such as rent, bills, groceries and transport.
4. You overdraft on your account often
This is another sign that you may be living beyond your means. With the help of a carefully planned budgt, you should be able to make it from one pay day to the other without over-drafting.
5. You are borrowing money from friends or family
Doing this can put both you and your friends or family in an awkward position. Now is the time to put a plan in place to pay back those who were kind enough to help you in your time of need.
6. You’re selling assets you need to raise cash
If you’re selling a car, electronics or other items that you actually kind of need – just to raise cash – then you’re headed towards a financial crash. Making money off decluttering is great! But ensure you have a long-term plan in place to support your spending.
** This advice is general in nature does not take into account your personal situation. Always speak to a finance professional before acting on any of the advice given to you. **
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