Warning Signs Of Financial Distress
It is not always easy to tell if you are in financial distress. Sometimes financial problems sneak up on you and the symptoms of them become your new normal. This is especially true if you have been having problems for months. The things that you do to survive might start becoming normal to you, even if they might seem strange or troubling to others.
Take a look at some of the warning signs that you might be facing financial troubles. If you determine that you are, we can then take a look at some steps that you can take to cure them.
- You Rely On Credit Cards To Pay Expenses
Credit cards should not be a part of your daily life. If you find yourself using them to pay for groceries or utility bills, this is a problem. If you are using your credit cards to pay regular bills, you are probably only making the minimum payments on them as well. Credit card debt is building and your monthly credit card bill is also increasing, contributing to your troubles.
- You Are Regularly Using Payday Loans
If you have taken out more than one payday loan in 6 months, this is troubling. These are emergency loans with high loan fees and effective APR’s. They can solve an immediate problem but they leave you in worse shape when you repay them on your next payday.
- You Often Pay Late Fees
You should have enough money in your budget to pay your bills on time. If you are regularly paying late fees or overdraft fees at your bank, you are probably in financial trouble. At up to 40 dollars a pop, these fees can wreck a budget.
- You Have No Emergency Savings
Saving money is a part of any responsible budget. If you have no savings, it means that you are using every penny of your income to live. This leaves you no room for emergency expenses and means that any small problem could send you into real financial distress.
- Your Have A Low Credit Score
If you have a bad credit score, it is a huge sign of money trouble. With high credit card utilization and poor payment history being the biggest causes of a low score, if yours is in the gutter, it is a big sign of trouble.
How did you do? If any of the statements above are true, you are probably in a bit of trouble. If more than one was true, you are probably in real distress. Now that you can see that, let’s look at how to get you out of it.
Getting Out Of Financial Distress
Just because things look bad now does not mean that you have to keep living the way that you have been living. You can make changes to the way you handle your money. Changes that will make a huge difference in your life. Here is what you need to do.
- Set A Proper Budget
You might not even have a budget and if that is the case, you need to get one typed out. Once you have it, you should make some cuts. Your budget should be enough to pay all of your bills and allow you to save a minimum of 10 percent. If you make 3000 dollars a month you need 300 dollars a month to go into savings.
If yours does not do this, you need to make some cuts. Eliminate cable, downgrade some services or even move to a cheaper home if necessary. This is the time to make hard decisions.
- Look Into Government Programs
If you are of low income, you might be able to qualify for government programs. Take full advantage of all of the ones that you qualify for. Housing vouchers, food stamps, etc. There is no shame in asking for help if you need it and you qualify.
- Contact Your Service Providers & Creditors
The worst thing that you could do in times of distress is ignore your creditors phone calls. Contact them directly and ask for assistance. Most will be willing to help you because they know that if you default, they will probably never collect anything. They might even have programs to help you . Utility companies, for example, often have programs to help those who need money desperately and can not afford their bills. You might be able to receive assistance or at least keep the power or water on, avoiding reconnect fees.
- Add Some Additional Income
If you are not making enough money to pay your bills, you need to cut those bills or increase your income. A part time job can be just the thing. Look to local retailers, especially those operating 24 hours such as Walmart. They are always looking for help and have shifts that can fit any schedule.
If you have a vehicle, delivering food or driving people around can earn you a nice side income. There is almost always some side work available to you but you must look for it.
- Keep Pushing Forward
Above all else, try to stay positive and keep pushing forward. If you take steps to make your life better, they will get better.