You are currently living the 'American Dream'. You are happily married, you have two kids, a dog, a nice home with the white picket fence, you drive an SUV and a mini van and you are in debt. Your story is just like thousands of other Americans in this country. Well, your story isn't exactly as I just described but its pretty similar. Likely the only completely true part is being in debt. You are staying on top of all of your minimum monthly bills and are making ends meet - or so you think. You've been drawn into a false sense of financial security and think you know how to manage money. The truth to be told is you may be in too much debt. Here is a list of 10 warning signs indicating that you may be in over your head.
1. You have little to no savings
2. You can only make the minimum payment on your credit cards or other bills
3. You've been denied credit
4. You use cash advances from your credit cards to pay other bills like heat and hydro
5. You are sometimes late with your bill payments
6. You keep making purchases with your credit card adding to the balance
7. You don't even know how much debt you have
8. Your bank accounts are overdrawn and once in a while you bounce checks
9. You have several credit cards that are near the limit or are maxed out
10. You have lied to family and friends about your debt and over spending
Does one or all of these statements sound like you? Even if only one of those is true you might be in some sort of financial trouble and may need to learn how to manage money all over again. The good part is you can. The hard part is you need to begin taking control of your finances ASAP. The longer you wait, the worse the problem will get. Finances are something that cannot be swept under the rug and forgotten about.
STEP 1: Now is the time to create a check list and go through it. Sift through those 10 things and find out what ones correspond with you.
STEP 2: Discover a way to correct those problems. You have no savings? Start creating your emergency fund. Add $25 a week or whatever amount you can to build that balance to $1000. Do you keep buying things and increasing your credit card balance? Start buying things with cash and start making larger payments to your credit card. The list is important to take care of and you have to fix those problems.
STEP 3: Set goals and start making them into reality. Next week isn't the best time to begin making goals. Start today - better yet, start right now. Don't make goals that are too high, create financial goals that can work such as cutting your hydro bill by 5% or 10% or saving money by quitting smoking. Small steps are key to goal setting and learning how to manage money.
Being lured into a false sense of financial security isn't hard to do if you don't know the signs of serious financial problems. If you've gone through this list and discovered any matches it may be time to start fixing those problems before that security becomes a major issue. Knowing how to manage money is simple and everyone is able to do it.
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