Are people in debt born or made? Do you have a friend who always seems to be in financial trouble? Or are you one of those people? The chances are that if it’s you, it won’t be for long.
That is, once you learn the telltale signs and traits that lend themselves to financial insecurity. Debt can wreak havoc on your life, and make you feel like there’s absolutely no escape. Here are a few signs to watch out for to make sure debt doesn’t get the better of you.
Intent On Having Fun No Matter What The Cost
Everyone knows people like this. When Friday comes along it often feels like you’ve earned the right to go partying and spend your hard-earned money. But unless you keep this in check, it can become quite a serious problem.
The cost of things such as alcohol and food are constantly on the rise, and whereas nights out can be fun, they are also costly when considering things such as rent, direct debits and existing debt. Many people in considerable debt find that partying is the only relief they can get, but this can only lead to one place: further debt, with no money to cover your overheads.
Don’t Bother With Savings
To remain financially secure, you must always save as much money as possible. It’s true that we can’t save everything, and that from time to time a person needs a few treats and luxuries to help keep sane, but not saving at least a small portion of your income can land you in hot water.
Sometimes, we don’t know what’s around the corner, and without any savings, things could get really bad. To make sure you’re always covered it is a good idea to set up a constant direct debit which puts a little money aside regularly for when you need it.
Have No Rules About Money
One common trait of financially insecure people is that you constantly hear them saying “it’s only money.” This is a big mistake. Having no rules about how much you spend and where you spend it can have serious repercussions on your financial status. To maintain stability, it is important to decide which things are worth spending money on and which are just a waste.
Eating out is great fun, but it’s expensive – especially if you are doing it often. So try only eating out once in a while, to make the occasion seem really special. Similarly, the desire to buy new products such as cameras, smartphones and televisions can often be a waste of money when the things you own are perfectly functional.
Constantly Spending On Credit Cards
Individuals who constantly make purchases with credit cards as opposed to cash, and repay the amounts with minimum payments can also fall foul of the debt trap. The economy is not at its most secure point right now, and whilst you may be able to afford what you’re spending, your circumstances can easily change.
You could suddenly face unemployment, find yourself unable to repay each month’s payment, then spend the next few years only being able to cover the interest of your payments. Short term loans are a good way to consolidate your payments into one and gain valuable time to help change your situation.
Image credit to 401(K) 2012 from Flickr
About Author | Amie is finance writer and blogger, who writes for payday loans sites like Wonga. In her spare time she enjoys developing her financial knowledge within the online money market.