Although many consumers may think they are good at managing money, financial disasters tend to sneak up without warning. Many consumers are unaware if they are heading towards financial disaster until it is too late. Although we all have good intentions when it comes to money management, it is easy to get off track. Debt management and avoiding potential financial trouble has a lot to do with knowing what to expect.
Signs You are Headed Towards Financial Disaster
According to a study from Bankrate.com, many U.S. consumers are only one step away from serious financial trouble. Only 38 percent of respondents have enough money in savings to cover an unexpected expense. Therefore, identifying these signs early on can help you prepare yourself better. Here goes!
- Living paycheck to paycheck – If you find you are living paycheck to paycheck, you may be on the verge of a disaster. Even a single financial emergency, can put you in a serious financial crisis.
- Dipping into savings – It may seem harmless now. However, dipping into your savings can cause devastating long-term impacts. Our credit counseling advice is to avoid this.
- Not paying bills on time – Paying your bills late leads to extra charges and can have a significant impact on your credit score. Some companies will even increase your interest rate after just one late payment.
- Refusal of credit – If creditors refuse to give you credit, it is a sign that you are heading towards a personal finance disaster. This can most often mean your credit score is extremely low and the creditors see you as a high risk.
- At or over credit card limit – Your credit utilization plays a big part of your credit score. Consequently, being at or over the limit will have a serious impact on your credit. These can lead to implications such as denied loans or high-interest rates.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.