Financial trouble ahead?
Sometimes we feel ourselves sinking into the pit of debt while other times life throws curveballs that leave us in a huge financial mess. Many people resort to borrowing money to help them meet their financial obligations, not taking into account the long-term potential trouble they’re getting themselves into.
Using a credit card or taking out a loan instead of paying for things outright may make you feel less financial pressure; however, it’s so easy to lose track of your finances. It’s important to know all the warning signs that you may be heading towards a financial crisis. Here are some of the signs:
- Credit card debt. High credit card debt is a major cause of many bankruptcies. Keeping your credit line available for emergencies is important.
- Paying off as little as possible on your credit cards. The slower you pay off credit card debt, the more money the bank makes off the interest you’re paying. Your goal should be to pay off debt as soon as possible and avoid making more and more of it.
- Missing payments. If you’re missing payments due to trying to pay them as late as possible, you may be heading for financial trouble.
- No emergency fund. If you’ve hacked into your emergency fund to pay your bills or have not set one up yet, you need to reassess your financial situation. It’s crucial to have an emergency fund to avoid getting into debt.
- Taking out a home equity loan to consolidate debt. This may offer you immediate cash to pay off smaller debts, such as car loans, clothing accounts and credit cards; however, it isn’t a good financial decision if the habits causing your debt continue.
- Inadequate medical cover. While ensuring proper health insurance may seem like a huge monthly expense, an accident or illness can leave you in massive debt. Make sure you and all your family members have decent medical cover to protect you from debt.
- Harassing calls from creditors. If you’re avoiding answering your phone due to fear of being caught by collectors, you’re probably already in some serious debt. Make sure you contact a Debt Rescue today to get out of debt.