January often brings resolutions of getting back in shape after a Christmas of indulgence. While mostly this might relate to our waist lines, an equally important part is to look at getting our finances back in shape. Understanding how and why we spend and what we spend can help us to make more conscious financial decisions. It can also help give us a sense of control and help to ensure that we manage our finances in the best way that we can. Often, financial difficulties do not happen all of a sudden more often there are indications that all is not right with your finances. Some of the key warning signs are:
Too little money at the end of the month
This can occur when you spend all your money as soon as you receive it and then you can be left with a shortfall at the end of each month. An easy way of preventing this would be to do up a budget and this will help you manage your finances better.
No nest egg
The failure to build up a savings plan can sometimes indicate that a person is not managing their finances. As a general rule of thumb, it is recommended that you have three months savings set aside in the event of unplanned expenses. When planning your budget, you can include a savings plan to help build your nest egg.
Credit Card Debt
Ideally you should clear your credit card balances on a monthly basis. Failure to clear the balance monthly can be a sign of financial difficulty and can prove to be expensive.
Bills paid late
If you find that you are paying your bills late or missing payments this is a strong indicator that you may need to look at managing your finances better. When planning your budget ensure you include all your bills, this way you will be able to pay on time. This will help you in the long run as you will avoid late payment and unpaid fees.
Borrowing off family and friends
If you find you need to borrow off a family member or friend consistently, this can be a sign that you are financial overstretched. With the correct budget in place you can take control of your financial situation.
Making small changes to our spending habits and devising a budget can have a positive impact on our finances. Ensure your budget includes all of your outgoings. Why not make 2018 the year that you take control of your finances and avoid financial difficulty.
