10:47 02 June 2014
At some point in your life, it may seem that your debts have reached a point of no return. When all you think during your waking hours is how to get out of your financial bind and getting back to a time when you were debt-free, then it is the time to put your house in order.
Some of the signs that say you have to get your act together in terms of your finances are:
Putting at least 10% of your monthly income to a savings account should be a basic goal. However, it would be difficult to set aside 10% or anything at all from your income if you do not have a full accounting of your expenses so that even that small portion of your income has to be spent for the most basic needs as majority of your money now goes to debt payment. If you have set aside saving even the littlest amount from your monthly income, it is definitely time to assess your budget and turn over a new leaf. Saving any amount of money regularly requires discipline that can spell a difference in your financial well-being.
Although buying a car or a house is not an immediate goal, it will do you good to know how your credit standing is. You can at least get a free copy of your credit report from annualcreditreport.com which will also apprise you if somebody have been using your identity for illegal gains.
You have been using your savings for quite some time without putting anything back or investing anything. Needless to say, in the event of any emergency such as illness or losing your job, you will have no fall back as you have frittered away your savings.
The worst sign that you are financially in trouble is if you are using your pension to fulfil your monthly obligations and using it to fund your basic expenses. On top of losing what only security you have upon retirement, you will also incur penalty charges for pre-termination of deposits and investments. The better option would be to get another job or cut down on unnecessary expenses and get by having only the basic of things until your financial health becomes better.