Financial trouble is not a balaclava-wearing intruder that made its way into your home undetected. It doesn’t happen overnight, and it is not an accident. No, unfortunately financial trouble is found at the end of a long and winding road of ongoing financial mistakes that have been ignored for far too long.
Luckily, there are many warning signs along the side of this road. If some of the following sounds familiar, stop, and change your course today.
Warning Sign 1: You have no idea what your financial situation is.
If you don’t know what is going on in your accounts, it means you are spending on a whim with no budget in mind at all. This kind of irresponsible spending is dangerous, even if you have a lot of money to spend.
Stop! Make a budget and stick to it.
Warning Sign 2: You are buying food and petrol on credit every month.
The moment you start funding essentials with credit, warning lights need to flash in front of your eyes. It means that your expenses are more than what you earn and that tank of petrol you have just “borrowed” R600 for will escalate to R1000 in less than three months.
Stop! Cut costs immediately.
Warning Sign 3: You are lying about money.
Are you hiding your credit card statements from your spouse? Does he/she have no idea how much debt you have and you are telling lie upon lie to keep it that way? If you are lying about your financial situation it means you are ashamed and this shame will cause you to stress, and perhaps even spend more.
Stop! Spill the beans and make a plan together.
Warning Sign 4: You’re funding debt with debt.
Once you start transferring money from your credit account to your cheque account to fund your home loan, car payment or any other debt, you are paying double interest. If you are doing this regularly you will soon find yourself in far more debt than you started off with.
Stop! Make a new budget and cut all luxuries.
Warning Sign 5: You have no savings.
This might not seem like such a big issue. At least you are living within your means, right? Wrong. If you have no savings or emergency money you have nothing left at the end of each month, which means you will need to take out a loan or use credit to fund any unforeseen costs. And because you don’t have money left at the end of the month, you won’t be able to pay off this debt.
Stop! Cut costs and start saving.
Warning Sign 6: You are only paying the minimum amount on your credit card/s.
Just paying the minimum on your credit card bills means you will never get rid of the debt and because of the interest the total amount of debt will escalate each month. In other words, you are throwing away money.
Stop! Pay at least double the minimum amount every month.
Warning Sign 7: You are borrowing money from family or friends.
Nobody wants to call on family or friends to help with money. Unfortunately, the ugly truth is that if you are turning to others for money you have most probably depleted all the credit sources available to you. Borrowing money from other people won’t solve anything.
Stop! You need the professional financial help of a Debt Rescue debt counsellor. Remember, we are here for you if you need us.