Warning Signs You Could Be Heading for Financial Disaster

5 signs to look out for.

There will be days when cash flow is smoother than usual and you're rolling in dough. And then, there are the days when money is tighter than usual, and you're struggling to keep your head above water.

You'll often find yourself waking up in between these two scenarios, so it's important to know the signs that indicate your time is running out. Here are a few pointers which you should look out for:

1. You do not have any savings accounts.

Set aside some time to build a plan around saving some money. Make sure you give yourself some wiggle room, but don't go over the top and apportion too much of your paycheck to your savings account.

When it comes to setting your goals, when do you want to have enough saved up? Let's say in six months - do you have to put six months worth in the bank at one time? No! If you're able, try saving up incrementally rather than making huge transfers out of every paycheck - this will help lower immediate spending because it'll feel less painful when you do spend.

2. You pay penalties and late fees often.

Set up bill reminder notifications and payment scheduling in advance. You can create debit orders for some of your bills, scheduling them for a specific date that you know you will have money in your account. A good idea is to schedule them as close as possible to your salary date.

3. You have stopped trying to pay off your debt.

If you're overwhelmed with financial debt, reach out to a debt consultant regarding help with paying off your debt. The longer you wait, the more interest will pile-up and negatively influence your credit score.

4. You do not have a budget.

Setting up a budget, or having someone set it up for you, will help you stay on track with your spending. If you don’t have a clear picture of how much money is coming in and how much you spend each month, it can be very easy to get into debt. It’s important to create a plan that outlines where your income is coming from, how much you can spend on everyday items, and what businesses or individuals are charging you interest rate for credit cards.

5. You have been declined for a loan.

Make an effort to increase your credit score. If you've been denied a loan, this likely means that your credit profile needs improvement, or you may have negative information on the report. Request the details of your report and be sure to examine it fully. Check to see if any outstanding loans will be affected by payments that are late or paid off, as well as any other instances that would lower its score.

Make an effort to pay bills on time and limit additional applications for new credit so you can invest in making payments instead. If you carry little debt, this should help up your credit standing without excessive work!

For more advice on how to manage your debt, consult Credit Health.