I know, I know, no one wants to hear the words FINANCIAL DISASTER attached to their name but the truth is some of us find ourselves quietly heading that way without even realizing it.
Just like some people refuse to acknowledge a growing waistline or a relationship that’s slowing deteriorating, many people also ignore the signs of impending financial disaster.
But here’s the thing – most personal financial meltdowns happen over time. They’re rarely the result of a one-time event.
And shock, horror – the warning signs are quite clear.
You simply need to look at your life and be honest with yourself. So here they are: 7 signs that you are headed towards a financial disaster.
Do you recognize any of these signs of financial disaster in your own life?
1 – You overdraw your checking account more than once a year.
If you’re already struggling to pay your bills with your available income, overdraft fees only make the situation more challenging. Overdrawing your account can be a symptom of these things:
Poor money management.
Sure, some bills simply take longer to clear than others.
But it’s important to do whatever is necessary to stay on top of your pending balance.
It can also be a matter of simply failing to pay attention.
Having good finances requires regular attention. Are you giving your money the proper attention it needs?
- Do you have a budget? Are you sticking to it?
- Ask yourself why you are running out of money before you run out of month. Yes this is an important question to ask! Be honest with your answer.
2 – You’re at or near the limit of your credit cards.
If you are constantly at the limit of your credit cards, your credit score risks the potential of taking a hit.
I know you may be tempted to acquire another line of credit but be warned! In most cases, this is only a short-term solution with a poor long-term outcome.
3 – Relying on a future one-time financial event.
Counting on an inheritance or big tax return to balance to your financial situation is a sign of significant potential financial disaster.
It’s important to arrange your finances so that your situation is under control without the need for periodic injections of extra income just to get by.
4 – A failure to save any money.
It may be time to view a deposit in your savings account as just another expense.
If you’re unable to make that payment, you’re headed in the wrong direction financially.
Another word of warning: all it takes is one unexpected bill or the loss of a job and you’re in dire straits. Savings is a better financial cushion than credit.
5 – Borrowing money from family and friends is another sign of impending financial challenges.
Yeah it’s not really cool. Not only is it a sign of financial struggle, it can also be a real strain on your relationships.
Most of us loathe asking the people in our lives for money, so recognize the seriousness of the situation if you’re considering it.
Even if they don’t say it to your face, people will begin to become annoyed with you.
6 – You’re dipping into your retirement funds to pay your bills. Stealing from your future is a good sign that the present is shaky.
Do I really need to tell you this?
You’re killing the magic of compound interest and likely incurring penalties and taxes by making early withdrawals.
You don’t have an unlimited amount of time to replace those savings so try to avoid touching your retirement fund!
7 – Using a home equity loan to fill the financial gaps.
Another massive warning sign!
Using a home equity loan to pay bills or to purchase something you can’t currently afford is a dire warning sign.
Not only are you financially struggling, you’re also putting your home at risk.
Think long and hard before borrowing from the equity in your house.
So there it is – 7 signs you’re headed for financial disaster.
If you recognize one or more of these financial warning signs, please do yourself a favor and start working on a solution.
When these financial conditions start to pop-up, it’s usually only a matter of time before things get significantly worse.
Make strengthening your finances a priority in your life.
Take control of your financial future starting today â€“ you will be so glad you did.