There are many strains on the financial side of life at the moment and it has become very difficult for many to make the money that they have coming into the home stretch. There are some very serious warning signs that could tell you that you are need of financial help before you move even closer toward bankruptcy.
Many people spend many hours searching data to see if there are signs that could warn of impending danger and they are the same in the financial markets. The Association of Independent Consumer Credit Counseling Agencies have conducted such research and have come up with areas that can warn of impending danger. They predict that those that are in similar situations are heading towards bankruptcy.
These are a way that many people can find themselves in a lot of debt and the credit card companies are partly to blame with the increasing of the amount a person can borrow. Yet, if they are used correctly they can help to build a credit file but if they are miss-used they spell disaster. If you are holding credit card debt and it is more than 10% of your annual income then you are risking your financial stability and could be veering toward bankruptcy. It is a difficult situation to escape from once you have succumbed to the credit card debt. It is even more difficult to escape if you are only paying off the minimum about of the balance each month.
There are messages everywhere about the need to have some sort of savings, with some suggestions of 3 – 6 months’ worth of living expenses stashed away in case of an emergency, like losing your job. You need to have a safety-net so that you are able to continue to live until you secure future employment. The statistics suggest that if you have no savings or less than the recommended amount then you are not in the best financial position that you could be in.
Do you run out of money before your next payday? Do you put your living expenses onto your credit card? This is an indication that you are living beyond your means and you are heading in the wrong direction. It might be the time that you think about creating a budget to get your finances back on track. You will need to work out what you spend your money on; you might need to cut back some areas so you are able to make your money last before the next pay day.
The original idea of the credit card was to give the user access to an amount that they could use to buy items that were more than they had the money for. It was like a loan, but it has developed into a commodity that is used on a regular basis and this could lead towards bankruptcy.
It is important that if you have bills that are spread out over a period of time that you are paying more than the minimum amount of the bill, this is even more important if you are still adding to the debt. You could work out a debt repayment plan.
- List all the debts that you owe
- List all the interest rates of the debts
- Aim to put more money into the debt with the lowest balance
- Continue until you have no debts left
What would happen for you and your family if you were to lose your job? How would you pay the mortgage or the rent? How would you feed your family?
These questions are faced everyday by people that lose their jobs, and life will be difficult for them to survive until they can find a new job. But their lives will be that much easier if they had some financial planning in place.
It is important to make sure that you are not living beyond your means. It might mean that you can’t afford the latest in gadgets or the trendiest clothes but what it will mean will be one less bill to worry about when you have got limited funds to go around.
No matter what your financial position is there is some way to make it better. You might need to seek advice and work out ways to get out of debt but it can be done. There are services that you will have access to that will help you understand where you need to go, they will not judge you, but they will help you find your path back to better money management.
If you are able to find your way out of debt rather than going bankrupt it will save you a lot of problems in the future. Look at your options before you make any life changing decisions.