It is not until some people are living on cash advances and bad credit auto financing that they realize there is a problem. By then, they are sliding into financial demise head-first.
According to BankRate.com, there are several early indicators that finances are not up to par. Viewing these as warning signs can help a person get off the wrong financial path.
When late fees become the norm, it is usually because a person is lazy or cannot pay bills on time. An even stronger indicator that finances are lacking is making sufficient payments on a regular basis but not paying balances in full or on time.
When juggling monthly bills has become an art form, it is time to make a change.
If financial plans are based on anticipated future payoffs like large tax refunds or an inheritance, finances can be put in jeopardy. The larger issue underlying this is the rationalization of debt and failure to adhere to a logical payment plan.
If the bonus or refund does not come, equity may need to be pulled from the home to pay the bills.
Credit cards should be used as a cash alternative and for earning rewards. Each month, credit card balances should be paid. This balance rises if spending continues and the cardholder can only afford the minimum payments.
If a minimum payment is not made for more than 60 days, the cardholder is slapped with a rate increase that worsens the financial situation.
Receiving overdraft fees is a huge red flag when it comes to finances. These mean you are nearing the edge of the cliff due to not having income to cover debts. Borrowing from the 401(k) plan to make ends meet is an indicator of poor cash flow management.
If any of these signs are present, take immediate action to correct the situation.
