Financial stress undoubtedly is highly taxing and leads to disrupting life and relationships. Goes without saying that the same is dreaded and undesired by one an all. However, due to unavoidable circumstances, one does land in a financial mess. One of the major reasons is that people are unable to decode the warning signs and take corrective actions that may help in avoiding monetary trauma. Following is the list of 7 such signs that indicate troubles in the future. If you would be able to realize in time, then you would even be able to work around your finances and evade these troubles.
Unable to save from your monthly income Saving, as we all realize, is an ongoing process that will lead to financial stability and facilitate the achievement of money-related goals. Irrespective of the percentage of earnings, one must save something or the other every month. If you have been able to do it thus far but in the recent past, you have seen a spurt in the expenses and are unable to save even a fraction of the earnings, it may be an indicator that you are heading towards financial troubles. Beware, you would need to rework the expenses to be able to avoid issues.
Maxing out on the available credit limit Most of the dwellers of metropolitan cities own multiple credit cards these days. The combined limit of these cards generally is far more than the actual income. If you also have multiple credit cards and have steadily been inching close to the available limits, you are for sure heading towards financial troubles. You immediately need to take corrective actions and bring down the exposure on credit cards. Please be aware that you pay a fortune in interest and other charges once you start revolving.
Missing due dates of Credit Card payment You have been paying the cards on time so far but now the payments are getting missed. You might be paying the minimum amount due within a few days of the actual due date, but the fact remains that there has been a miss on the obligation. This is a clear indication that you are heading towards a situation of highly stressful financial times. This warning sign is as clear as writing on the wall and must be addressed with a clear plan of action.
Digging into the emergency fund for day to day expense People do set aside some money to fall back upon in grey days. This fund is termed as an emergency fund. However, if the same is being utilized to pay for day to day expenses, please treat this as a sign of stressful financial times ahead. Not being able to pay for the living expenses from the monthly income is a definite sign of trouble.
Missing dates of insurance premium Insurance is as important as savings itself and if you have missed on the payment of premium on any of the insurances, be it health, house, life, or vehicle please treat this as a sign of warning. Even a situation where you are planning to downgrade the insurance cover should be treated as a warning sign. For example, downgrading the car insurance from comprehensive plan to only third party insurance and not opting even for the theft cover.
Getting denied on new credit Getting denied on that loan application is also a clear warning sign. The lending institutions do not lend to an individual in two situations. First, if one’s name is in the loan defaulter list and second where they feel that the borrower is over-leveraged. While you may not have had any default so far, but a denial means that the bank is not comfortable in lending to you on account of the loan exposure that you have.
Thinking to borrow from friends and family If you are planning to borrow from friends and family for the short term, it only indicates the mounting expenses that you are unable to meet through the regular income. You would need to take a step back before approaching the folks and evaluate the reason for having this thought. It is definitely a sign of financial troubles.