In personal finance, there are numerous ways to fall behind, get into trouble, make mistakes, or incur expenses that you could not avoid. You can’t do anything about the past, but you can start putting out your current financial fires before larger troubles arise on the horizon.
What are a few red alarms that your finances are headed toward serious trouble?
- A credit card is maxed out
- Fail to pay-off your credit card balance each month
- Have not opened a Roth IRA, even though you are working
- There are people financially relying up you, but you have no life insurance
- Routinely use payday or car-title lenders
- Getting divorced without a financial expert to split pensions and assets
- Have borrowed money from family and friends
- Student loans have gone into forbearance
- Your bad credit rating requires that someone else co-signs for your loan
- You have a variable interest-rate mortgage
- Prematurely taking money from retirement accounts
- Routinely gamble or buy lottery tickets
- Have clothing, shoes, or accessories that you never wear
- Overspend at restaurants and bars
- Do not monitor risky investments, doing nothing as they collapse in value
- Have money secrets that you keep from your spouse
- When you refinance your mortgage, you take out extra money
- Borrowing money from your 401(k) account
- Fail to set aside money for income taxes
- Have no estate planning – Will, Power of Attorney, or trusts
Some of these arise from not knowing what you can afford or living above your means, and others are from a lack of financial literacy. However, if you have run into anything similar to what is on this list, please use it as a trigger that you need to actively make some immediate changes in your life to create financially stability.