Managing money is a daily balancing act and not everyone can say they are always on top of their finances.
We often find ourselves at the end of each month, scratching our heads and wondering why we are, once again, counting down the days until payday.
Six Signs You Are Not As Good With Your Finances As You Think
6. You Have No Idea How Much You Spend Each Month
As your paycheck comes in, you think, “Great! Let’s get shopping!”. While it may seem like you are only indulging on a few items that won’t hurt living expenses, such as petrol, transport, food, water, electricity and unexpected emergency expenses, these are the same purchases that leave you leopard-crawling to pay day each month.
It is important to know exactly how much money is coming into your account each month, as well as how much is going out.
TIP: Take time to tabulate all expenditures by starting from the moment you received your paycheck to all purchases thereafter until the following month. This can shed light on current spending habits and how you need to change them. This may include fewer takeaways, no unnecessary shopping, and no frivolous spending.
5. You’re Carrying Credit Card Debt
There are understandably two types of debt: good and bad.
Good debt includes things like buying a house and improving your credit score by taking out loans and paying them on time.
Bad debt is as a result of poor financial planning and choices, and is also usually paired with high-interest rates (as you have no choices but to accept). Investors and financial service providers, such as banks and insurance companies, will also regard you as a high-risk case.
Improve your financial habits by making paying off your credit card debt a priority. Debt has a high-interest rate and as a result can quickly get out of control if not made a core-focus.
4. You’re Surprised By Your Bills Each Month
As mentioned above, tabulating your purchases each month is a way to assess how you spend money. It also forces you to look at the reality of your financial outlook.
Being surprised by certain bills each month indicates a frivolous spending habit.
3. You’re Stressed About Money
Money is stressful, we get it. But feeling stressed about it only makes your decisions less tactful and less strategic. Living paycheck-to-paycheck is a risky business, so take ownership of your money issues and start with just one problem at a time.
Pinpoint the exact causes for your stress and address them first. Pretty soon, all progress made will trickle into the nitty gritty as you start to regain control of how you spend your money.
2. You Think Saving For Retirement Can Wait
Saving for retirement starts with an active decision. Putting off saving for retirement means you are placing yourself further and further away from actually retiring.
Remember, good habits for managing finances start when we are young.
According to a global report published in 2015, 36% of retirees wished they had started saving for retirement sooner.
1. You Never Compare Financial Packages
Simply paying the first insurance company you find and entrusting them to look after you is not a wise financial decision.
With such a cut-throat market, it is vital that each insurance quote you receive is meticulously compared alongside other similar insurance offers.