Personal finance is the financial management of either an individual or family as a unit. This means that you are able to pay for day-to-day living expenses as well as unexpected emergencies while saving a part of what you earn for both investment and retirement for a brighter financial future.
Unfortunately, many people don’t realize that they’re mismanaging their money until it’s too late. The earlier you realize you’re having financial issues, the better chance you have of fixing them because time is your ultimate friend.
Check your financial status now against these early signs indicating that you might be in a financial trouble.
You Keep On Waiting for Payday. It is few days away before you’re about to receive your salary again and you are just measly surviving with a few pesos in your wallet or bank account to cover for your day-to-day living expenses such as food and transportation. If you are in this situation, you are in a big financial trouble when you lose your job.
If you’re living paycheck-to-paycheck and you don’t have enough savings because you usually spend it on wants, buying all the unnecessary things you don’t really need, then you are slowly creating a deep hole against your financial future.
You Rely on Friends and Parents in Times of Emergencies. If you constantly rely on your friends and parents in times of emergencies, then you are headed for a dull financial future.
This means you don’t have prepared emergency fund in times of uncertainties. You need to seriously save a minimum of 6-months worth of your monthly expenses to cover for financial emergencies such as losing a job, or medical expenses.
You Can’t Pay Your Credit Card Bills. Credit cards are one of the best sources of bad debt if not managed properly. If you’re paying late because you can’t pay on time, that’s a clear indicator of future financial trouble.
With the huge monthly interest rate of 3.5% coupled with 7.5% late payment charges, you are sure to be in a financial crisis with mounting debts slowly accumulating if credit card debts remained unpaid.
And if your solution to your financial woes is to apply for another credit card just to pay your existing credit card because you have maxed out its credit limit, then you undoubtedly are headed to a more serious financial problem!
You Have Fighting at Home Due to Money Problems. Money is one of the main things spouses fight about. It can erode even the strongest bonds among partners causing arguments and eventually leading to separation or divorce.
If you’re hiding or lying about your spending habits and credit card bills from your spouse, then you could be headed for a financial disaster which might lead to separation or divorce.
You’re Not Investing for Your Retirement. No one wants to work for the rest of their lives. If you’re not even thinking about your retirement, then chances are you will be in a financial trouble during your golden years.
When you reach retirement age, medical expenses will start to peak as your health condition will start to deteriorate. Chances are you will rely on your sons and daughters who each might have their own family by that time. Admit it or not but you will be a financial burden to them.
You may be young now but actually this is the perfect time to build your own retirement fund since you’re still single and don’t have yet a family to feed and support. It is sad to see that some people just rely on luck, buying lotto tickets and playing star spins in the hopes that a windfall will come their way to cover for their retirement. Take note that you have a higher chance of being struck by lightning than winning the jackpot in the lotto.
When your retirement plans include winning the jackpot in lotto or counting on an inheritance, you’re expecting something to solve your financial problems that may not come true.
If any of these early warning signs of being in a financial trouble rings true to you, then it’s time to change your mindset, and discipline yourself towards saving and investing. Delayed gratification and self-discipline are your best allies.
Keep track of your expenses by listing down where you spend your money and see where you can possibly cut back. As you increase your savings, learn different investment instruments and invest it in order to grow and multiply. It’s never too late than never. The earlier you start these habits the better. As the saying goes, ‘the early bird catches the worm.’