6 Signs You Are In Financial Problems Even When You Don't See It

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

Some things seem completely innocent until you start calculating the consequences.

1. You do not have enough money to pay

Let's start with the obvious. Even if you occasionally remain penniless for several days, this is a reason to think about whether everything is in order with your financial discipline. And you definitely need to change something if it happens regularly.

It is possible to do without money for several days, but at the same time you are at great risk. Suddenly there will be health problems or other force majeure. Therefore, something urgently needs to be done.

What to do

The advice "to earn more" suggests itself. This will not be superfluous, but it is unlikely to solve the problem, because you are spending money irrationally and, most likely, you will continue to do so when earnings grow.

With any income, especially with a low one, you need to plan your expenses. You may not want to make a budget accurate to the penny, but at least you will have to calculate it approximately. Otherwise, at one unpleasant moment, you may start to get into trouble.

2. You have no savings

You have enough for everything, and it seems that there is nothing to worry about. In fact, there are reasons for alarm. Money can keep you safe in many ways, such as if you get sick and need expensive treatment, or if you have to quit. Savings will help you ride out a bad period.

If you are an optimist, consider that not saving is taking your chances. For example, you cannot profitably buy vacation tickets, because right now you have no money, and your salary is still far away.

What to do

Save money on every paycheck, say 10%. You should have accumulated an amount equal to income in two months, and ideally in six months. This will help to cope with force majeure in case of their occurrence.

3. You have multiple credits

But you are using things bought with bank money right now. Is that how you reasoned when you took out these loans? As a result, paying off the principal and interest costs an impressive amount, which you could, for example, save to buy the same thing, but without overpaying.

When it comes to vital matters, of course, the loan is justified. But do all the purchases you borrowed for fall into this category? If not, you are not serious about money and too indulge in momentary desires, and it can end up sad.

What to do

Start solving the problem with consistent early repayment of loans. But first, analyze your debt load to understand which loan to pay off first.

For example, you now have three loans. And you can allocate 5 thousand a month to use them additionally to repay the loan with a reduction in its term.

Credit	Balance, rubles	Interest rate, %	Term, years	Monthly payment, rubles
Mortgage	900 000	10	5	19 120
On the phone	70 000	15	2	3 390
On the refrigerator	24 000	15	1	2 160

If you make an additional 5 thousand on the mortgage during the year, then you will save 25, 4 thousand on early payments and reduce its term by 4 months. With a similar scheme, you will pay off a phone loan in 9 months and save 6, 5 thousand, on a refrigerator - in 4 months and save 1, 1 thousand.

Consider all options for early repayment, the best way is not always obvious.

At first glance, it is more profitable to pay off the mortgage ahead of schedule, since the savings are higher. In this case, after a year you will get rid of the refrigerator loan and you will have only two loans.

But you can start with the smallest loan for a refrigerator, and then it turns out that in 4 months you will close it and be able to repay the phone loan ahead of schedule in the amount of 7, 16 thousand (ahead of schedule plus the obligatory payment for the refrigerator). And this is just enough to pay off the second loan by the end of the year.

As a result, you will free up 5, 55 thousand rubles (3, 39 for a phone and 2, 16 for a refrigerator), which you can pay for a mortgage in a year without additional efforts and save much more.

4. More than 50% of your income goes towards paying off loans

When you have a salary of 2 million a month, you can live happily ever after and half of it. But let's turn to more real cases. With a salary of 30 thousand, giving 50% to banks is already critical.

In addition to the fact that this is just a heavy burden, one day a situation may arise that you urgently need money for something vital and you will not be able to pay off the loan. Penalties and fines will only exacerbate the situation, making it virtually hopeless.

What to do

You need to reduce your debt burden, but you won't be able to do it easily. First of all, you need to increase your income. For example, you can take a part-time job for the period that will be needed to get rid of at least one loan early.

Or you will have to save money in order to repay the loan ahead of schedule.

5. You have utility bills in arrears

Firstly, you can be deprived of some of the resources, charge penalties and, in some cases, even evict. Secondly, debts for housing and communal services betray your frivolous attitude to money. Mandatory payments are called so for a reason, they must be transferred on time. Lack of financial discipline prevents you from saving, saving and earning more.

By the way, debts on housing and communal services negatively affect the credit history.

What to do

Develop a good habit of adhering to a payment schedule. First, create reminders on your phone or Google Calendar.

6. You constantly quarrel with your partner over finances

You have problems not with money, but because of money, but that also counts. Constant conflicts in the family have not yet made anyone richer, healthier and happier.

What to do

Move from mutual recrimination to constructive discussion. It is important for you to hear each other, understand whether the problems that your partner is telling you are real, and come to some kind of compromise. If you can't do this, know: you have problems not only with finances.