Hindsight may be 20/20, but why wait until your finances have collapsed to see the warning signs of what got you there in the first place. When you know better, you can prepare for the future and making it secure.
Many good people find themselves struggling in serious debt with little to no options for relief. This reality is avoidable with the right preventative steps. Everyone should know the warning signs that lead to financial disaster and bankruptcy. Here are some red flags you should pay attention to when it comes to your financial habits.
- No savings account – When you don’t have a savings, you have no safety net. Living paycheck to paycheck is one emergency away from financial ruin. Unexpected medical expenses, car trouble, and other surprise expenses can crumple a fragile financial situation.
- Paying off one debt with loans or credit cards - Using one credit card or loan to cover your other debts is a sign you are headed towards a major financial bind. Debts of any kind are unstable and do not truly eliminate a debt. It is only transferring the amounts of debt from one place to another.
- You only make the minimum payment – The habit of only paying the minimum amount owed does not help you keep your head above water in the long-run. It is misleading to think that you are safe when you only pay the smallest amount possible.
These are just some of the many warning signs that you are headed towards serious money problems. If you change your habits, you can avoid a major disaster and even bankruptcy altogether. Do yourself and your loved ones a favor by studying better financial habits and making it a point to change the course of your finances.