5 Signs You’re About To Hit Financial Trouble And What To Do About It
All of us struggle with money once or twice in our lives. But if it’s become a regular battle for you, then chances are you’re about to face financial trouble. It’s important you act quickly to avoid it becoming a very serious problem for you and your family. Don’t panic. There are plenty of signs that things have reached a critical point. And there are also plenty of ways you can tackle them head on and avoid financial disaster:
You’ve Lost Track Of Spending On Your Credit Card AGAIN This Month
This is so easy to do because the card doesn’t feel like cash. Holding all those figures in your head as you go is another challenge as it can be days between each purchase. And who really wants to log into their account every day to check what has been charged? In reality, some charges don’t show up for days after you’ve made the purchase. If you buy with a debit card, this can often give you the illusion of have more money than you actually do.
One way to avoid this happening to you is to buy only with cash. You can then see in your wallet or pocket exactly how much you have left to spend. You can make informed decisions in a moment instead of having to do mental arithmetic or log into your bank account remotely. Of course, carrying cash comes with great risk. You might drop it or lose it. Worse still, it might attract unwanted attention to opportunistic muggers.
A top-up charge card might incur a few fees, but you can restrict your spend by only topping up what you can afford. This is enormously helpful for budgeting, and it’s a handy way to give the kids their pocket money too.
You’ve Lost Your Primary Source Of Income
Losing your job is one of the most devastating things that can happen to you. You might feel like heading to a bar and drowning your sorrows. Perhaps you need a few days wallowing under the duvet. There actually isn’t any time to waste. Get your resume up to date immediately, and make sure your LinkedIn profile is perfect. Now take any job you can find while you apply for everything you might want to do for your career. Any income, no matter how small, is better than nothing at all.
You should also immediately adjust your monthly budget to avoid spending more than is now coming in. Cut off the subscription TV packages. Put your spare room up for rent. Switch off everything you’re not using. Sell your high-end appliances and replace them with budget ones for a while. Stop using your car, and stay in on Saturday night. Remember, this dramatic change in lifestyle is temporary, but necessary to avoid debt.
There Isn’t Enough Cash In Your Bank Account To Cover The Rent
If it’s too late to cover the rent this month, then you might be panicking about an impending eviction. It’s important you let your landlord know what has happened. You’re not looking for sympathy, but you do need a little extra time to come up with the cash. Keep her posted as you take on work and drip feed in a little of the rent each week.
Of course, if this has happened before, you are running the risk of losing your home. There are several ways to raise cash in a hurry. You might sell everything you own for a lower-than-market asking price. If you have paid employment, you might seek a payday loan to pay rent for a month or two. Of course, this can be very expensive over the term of the loan, and you must always be certain you can repay it with your wages. The last approach is to borrow from family and friends. This can put extraordinary stress on your relationships.
Dipping into the red before you’ve even covered the rent is a sign that you’re spending more than you’re earning. It’s a good idea to go over your essential expenses each month. This includes your rent, taxes, energy bills, and food. Whatever is left can be spent on the next tier of priority expenses and so on. If you don’t have enough coming in to cover the basics, it might be time to find a cheaper place to live or take a second job.
You’ve Applied For A Loan And Been Told No
This isn’t just embarrassing, but it can also be a sign that you’re borrowing way too much already. Banks refuse loans for two main reasons. The first is your income. If you don’t have paid job, you’re not likely to get a loan. The second is your existing debt. You can only have so much before the bank would be found irresponsible if they gave you any more.
Try not to buy anything else that isn’t absolutely essential. Use the extra income each month to start clearing those other loans and debts. This might include a credit card or your car finance. If you think your income is unstable or low, start discreetly applying for better-paid positions. Perhaps you are due a pay rise or promotion?
You Spent More Than You Earned AGAIN This Month
This is really easy to do and isn’t usually a cause for panic. But if it is repeatedly happening, it is a sure sign your finances are in crisis. It’s time to get a handle on what is going on. Frugality is often key to control. You need a clearly defined budget and the willpower to stick to it. It’s important to make cuts to every area of your spend. This might include your food bill. Reduce the amount spent on packets, and go for fresh. You can then batch cook, and save more on your energy bills too.
Other ways to save money include giving up your car. Most journeys under six miles are quicker on a bicycle in rush hour traffic! There won’t be any parking charges at the other end either. Best of all, you’re boosting your physical fitness too. Journeys under three miles can be walked in well under an hour. How much time do you spend in your car commuting each day? The cost of the fuel, the insurance and the finance all add up. Where can you make savings to avert financial trouble?