Managing money is simple but it doesn’t mean it’s easy. I’ve been guilty of some of these things in the past. I wasn’t off the rails but close enough to take initiative to get my financial act together. Here are 5 signs you might be a financial disaster.
- You don’t have an emergency fund.
A fact of life is…life happens and bad things go with it. $hit breaks down. These realities often require us to fork over money. An emergency fund provides some piece of mind when you’re losing yours. I think if you don’t have a small emergency fund (whatever that amount might be for you) you’re running some financial risk.
- You don’t budget – to some degree.
We don’t have a strict budget in our house but rather a bi-weekly forecast of expenses. You can see what I mean here. A budget helps you pay the bills, pay yourself, and keep some money left over to have some fun. All three of these things are good things in my book.
- You don’t think you can retire.
I’ve heard the phrase “freedom 85” a few times at my workplace. If you don’t think you can retire it’s probably time for a financial checkup.
- You don’t pay off your credit cards.
With personal lines of credit and home equity lines of credit borrowing costs at a fraction of credit card interest, most people should never have credit card debt. Spend all you want but you can only spend so much until you have to pay the piper.
- You let bills slide.
Everyone experiences some degree of stress over finances at one point or another in their lives. Even if your financial situation is on terra firma it’s easy to forget bills and let them slide. If you find this is happening to you, it’s probably time to get your financial house in order.
Even if you avoid all these pitfalls, an income loss can happen that can put you or your family in a financial tailspin. The best most of us can strive for is to avoid these situations as much as possible.
What other signs demonstrate you’re a financial disaster or one waiting to happen?