Firstly, if you only have cents or pocket change for a rainy day, your finances need a huge improvement.
The first sign of financial trouble is when you have no emergency savings. Not having emergency funds or having very little for emergencies can lead to huge problems. You end up just taking out loans for everything that goes wrong, which can land you in debt.
Do you take out Payday Loans?
If you find yourself taking out payday loans, you are in financial trouble. It sets you up for financial nightmares. Having to loan money to pay upcoming bills is a sign of financial trouble. Your aim is to get rid of your bills not add to them. Taking out loans would only add to expenses you already can’t afford.These loans are designed to enslave you. You may think that they are very helpful but they are not long lasting and they are only backed by your paycheck. Bank loans and credit cards are even better than payday loans because their interest rates hardly exceed 30%. However, loans, in general, are not advisable.
Do you rely on minimum Payments?
If you are only paying your minimum monthly payments on your debt, you are setting yourself up for more debt. Minimum payments don’t help you pay off your debt. If anything they make your debt last longer and the interest on it increases.
The more you leave your debt unpaid, the more interest is added and debtors make money out of you. If you are not able to pay off your monthly installments in full then rather pay more than one small installments a month. This is better than paying the minimum once a month.
Have you stopped saving for Retirement?
If you haven’t been able to save money for your retirement because you haven’t had the money to do so, you need to examine your finances and find a way to take control. Once you have taken care of your current responsibilities, you need to fund as much as you can towards your retirement savings. Remember, that what you save know, you’ll be able to enjoy later in life, including interest.
Once you have taken care of your current responsibilities, you need to fund as much as you can towards your retirement savings. Remember, that what you save know, you’ll be able to enjoy later in life, including interest.