It’s an unfortunate truth that by the time most people admit their finances are in trouble, they’re already in deep. Learning to identify a few financial red flags in their earliest stages can help you stay on top of your debt.
If any answer yes to any of these questions, you may be headed for financial trouble. Stop spending, and make an appointment with a qualified Credit Counselor.
- Am I making only monthly payments on my unsecured debts?
If payments to your credit cards and lines of credit are consistently minimum-only, you are in danger of paying nearly the principal in interest before you pay off your debt. For instance, if you owe $10,000 at a rate of 16%, with an initial minimum payment of $200 and making only the required minimum monthly payment thereafter (remember that the minimum will go down as the balance goes down), it would take you 36 years and cost you an additional $18,659 in interest charges!
- Do I pay my bills late?
If you are habitually late in making payments, it’s a sign you’re mishandling your money. It will begin to reflect on your credit rating, and will accrue additional interest as well.
- Have I been turned down for credit?
If you’ve been denied a new loan or a credit card, it means the potential lender took a look at your credit history and your credit score, plus some additional factors like how much of your total available credit is currently in use, and decided you were a bad risk for timely repayment. If you’re overextended, it’s time to stop charging and start tackling your balances.
- Am I charging monthly expenses?
If you find yourself using credit to pay for groceries, gas, prescriptions or other necessities, it’s a sign your spending is outstripping your earning. The solutions are simple: make more or spend less. If you can’t pay your credit card bills in full each month, put them away and go cash-only.
Of course, the key to effectively managing money is as simple as living within your means. Stop spending, pay off your debts, set up some savings for emergencies, for big-ticket items, and for retirement, and you’ll be amazed at how quickly your nest egg grows. Call GTA today and let us help you stop trouble in its tracks.