It may seem as though financial trouble arrives out of nowhere to cause havoc on your life. One minute everything is going great, and the next you’re deep in debt, and creditors are calling and harassing you and/or your family.
Of course, this isn’t the way it actually occurs. There is almost always a slow progression and there are generally signs that could have given you an indication something was wrong. Here are 10 to watch for:
1) No Budget
Not having a budget doesn’t necessarily mean you’re in financial trouble, but it’s certainly an indicator. It’s far easier to overspend and get into difficulty if you don’t have a clear picture of what’s coming in and what’s going out on a monthly basis.
2) No Savings
If after you have paid your regular monthly expenses, and you look into your accounts and see that there is little or nothing left, it’s not a good feeling. It is so important that you have some savings to fall back on in case of emergency.
3) Using Credit for Everyday Bills and Groceries
When you start using credit cards or lines of credit to pay for your everyday bills or to buy your groceries, you know may be heading for trouble.
4) Fighting About Money Often
Recognize whether you argue with your spouse or other family members about using credit, not having enough to go around or long term financial goals; if this is the case, you may have a problem.
5) Making Minimum Payments
If you are only able to make the minimum payment on your credit cards or lines of credit, you will end up paying massive amounts of interest over time and eventually you may run out of available credit.
6) Missing Payments
If making minimum payments is a bad idea, missing them altogether is really bad. Nothing will mess up your credit score and credit rating more than a string of missed payments on your report.
7) Borrowing from Family & Friends
Never a good idea – even from Mom and Dad! It may cause bad feelings and damage relationships. If the bank won’t lend you money at a reasonable interest rate – there is typically a reason.
8) Unpaid Taxes
Not paying your taxes on a monthly or annual basis is a very negative cycle to get into. If you end up with a large balance owing to Canada Revenue Agency, it is almost impossible to catch up on the arrears and make payment on the new debt.
9) Using Payday Loans
NEVER use a payday loan. The interest charged on this type of loan makes it impossible to stop using them.
10) Not opening your mail
Ignoring mail and being afraid to see your credit card statements is a huge indicator that you are heading for a financial fall.