With so many ways to pile up debt, it’s not always easy to stay on top of your personal finances or manage your day-to-day expenses. Are you heading for personal bankruptcy? Know these 9 warning signs and get in control of your personal finances.
1. Late Fees
No matter which way you spin it, late fees aren’t worth the trouble. If you’re paying them because you’re a bit lazy (or maybe just disorganised) it’s basically throwing money away. If you’re habitually late because you don’t have the cash flow, it’s probably a sign of a deeper problem.
Late fees are a pain, but they’re also a really good signal. If you find yourself habitually juggling payments from credit card to credit card, you need to stop and think about what you can do to change this.
2. Waiting for your lucky day to come
Sure, we all know a story about someone who won the lotto, had a big win at the horse racing, or inherited a large sum of money, but entertaining these fantasies won’t do much to improve your financial situation. Dreams of making it big with a financial windfall might curb the nagging doubt in your stomach, but statistically speaking, it’s highly unlikely your problems will be solved with good fortune. Planning on that Christmas bonus to clear up nagging debt is a poor policy, as is hoping for a gambling win or vague ideas of inheritance coming through.
3. Nothing in the savings account
It’s just simply smart financial sense to have backup money for when you need it. Recommendations differ from one month, to six and even twelve, but it’s safe to say that if you don’t have something tucked away for a rainy day, then chances are the rainy day has been and gone, and you’re already in the danger zone.
4. Paying the bare minimums on your debit
We all have those months where things were a bit tight and you can only afford the absolute minimum credit card repayments, but if you’re not able to meet your debt repayments meaningfully over a stretch of time, this could mean deeper issues with your cash flow or budget management.
5. Paying for basic stuff on your credit card
This one is both a warning sign and a bad habit. If you’re just ducking down to the shops to pick up a few items for dinner and find yourself reaching for the credit card, think again. Is this just a habit? Why not use a debit card or cash?
If your only option when buying everyday supplies is to turn to the credit card, then it’s a sure indicator you’re on the road to personal bankruptcy.
6. Using your retirement fund to cover expenses
While superannuation is locked away until you retire, folks who manage their own super might be tempted to dip into their retirement fund to cover mounting debts. We can’t work our whole lives (who would want to) and you’re supposed to enjoy your twilight years. Don’t eat into your future because of problems today, speak to a Credit Counsellor and find out what we can do to help.
7. Fighting over financial issues
Money problems can lead to plenty of stress in the house. If you find arguments springing up constantly with your spouse or other family members, you might want to consider the root cause of this problem. Your family deserves to feel happy and secure, and so do you. Take action – discuss your financial issues with your family and figure out a good course of action. Talking to a Credit Counsellor could be the step you need to take to relieve the burden of financial debt.
8. Applying for more credit cards when your current one still has debt
It’s sometimes a little too easy to get your hands on more credit while in serious debt. If your solution to managing existing credit card debt is to seek out more credit, it’s likely a sign that you’re on the road to personal bankruptcy.
Think about your current financial situation. What’s your income and expenses? Does it seem reasonable that you will be able to afford more credit? If the answer is ‘probably not’, then you need to take action on your current debt before searching for more credit.
9. Can’t afford time off or to lose your job
What if you got sick and your personal leave and sick days aren’t enough? What if the company you work for goes belly up or you get retrenched? If there isn’t enough to fall back on, you risk accruing more debt than you can handle. Interest can spiral if you’re not prepared or can’t find a job quick enough.
Knowing what you owe
Sometimes it’s hard to face up to the piling debt around you, but without taking action the the problem isn’t going to be solved. Talk to Credit Counsellors Australia today and we’ll help you develop a stress free plan to managing your debt and getting back to a healthy, happy life.