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Red Flags You Are In Financial Trouble

The first step to solving your financial problems is to discover that you have a problem. Once this is done you can began to take action by scaling back your spending habits and implementing good financial habits. The sooner you admit that you have a financial problem, the quicker and easier it is to get yourself out of debt and began to save money. Once you notice the indications of a financial problem, it should motivate you to start taking action to fix that problem and obtain financial security. Here are five red flags that you are in financial trouble.

Debit Cards without a Thought

You may think using a debit card is much safer than a credit card where you can rack up debt by using money that you donق€™t actually have. However, debit cards can be just as dangerous when used carelessly. If you do not keep track of how much money you actually have in the bank, you can end up racking up a hefty amount in overdraft fees. You will never be able to achieve steady financial health when you keep wasting money needlessly. Instead, try using only cash for a few months, as it will force you to spend your money mindfully.

Racking Up Debt

If you find yourself using a credit card excessively, because you are living paycheck to paycheck then this is a huge red flag that you are in financial trouble. Using a credit card wisely means using it in order to increase your credit score by repaying your credit card bill each month. However, if youق€™re racking up debt by using a credit card, because you canق€™t afford to repay your bills then you need to make a change. Itق€™s a good idea to review your monthly spending habits and see where you can cut back.

It Pains You to Open Your Credit Card Statements

If you canق€™t stand opening up your bills and statements then chances are you have a financial problem. Piles of white envelopes that havenق€™t been opened or a bunch of unread emails from your bank is a definite red flag. If you find yourself scared of opening up your bills, you are most likely in debt. However, it is crucial that you do not avoid your financial problems, as they will only get worse if you do not take a pro-active stance to fix them.

Add on To Your Debt without Thinking Twice

If you have no problem adding to your debt because youق€™re so used to being in debt anyway, then itق€™s time to make a change. When you justify a bad financial habit, it will only keep getting worse. Instead of trying to resist a change that needs to happen, embrace your debt and realize that a change needs to be made. Although you may think itق€™s easier to ignore your financial problems and continue your spending habits, in the end being debt-free is much easier than dealing with the consequences of digging yourself into a deeper financial hole.

Borrowing Money from Family or Friends

If you donق€™t have the money to pay for something and you resort to getting a loan from a family member or friend than you most likely are in financial trouble. Borrowing money from someone you know tends to be the last resort for many people, and so is a clear indicator of financial problems. Remember that depending on others financially will never allow you to obtain financial freedom and security. Instead of borrowing money from someone you know, try asking him or her for financial guidance.