With the global pandemic in full swing, a lot of people are worried about their finances. But can you attribute your recent financial troubles to the crisis or is it a pattern that has been repeating for a while?
We spoke to the experienced Chang & Diamond team about the most common signs that could indicate you are close to bankruptcy, as well as what you can do to prevent this outcome.
While this isn’t a complete list, the items included are still indicators that you could be heading for bankruptcy. By being aware of the risks and knowing which warning sings to look ot for, you will be able to take your financial future back into your own hands.
You Keep Spending More Than You Earn
This is the main indicator you are heading towards bankruptcy and one of the most common warning signs. A lot of people file for bankruptcy due to an uninsured medical emergency, job loss or divorce. Others are simply bad at planning their day-to-day finances.
If you think you fall into the second group of people, you’ll need to put all your finances down on a paper. Get all the information from your bank account, bills and credit card statements. If the total exceeds what you earn in a month, you could be heading towards bankruptcy.
The solution sounds simple enough, but it is still something a lot of people struggle with: managing your finances rationally. Determine the amount of money you’d need to meet your monthly needs (and still be able to put some money aside) and try to reach that goal by doing a freelance job or working overtime. If not, try to cut your expenses by subscribing to a more affordable internet plan, reducing your heating and cooling costs or refraining from impulse purchases.
You Put Off Medical Care And House Maintenance Because Of Money
Do you often delay the following due to lack of finances:
- Dental work
- Prescription refills
- New eyeglasses
- Roof repairs
- Plumbing issues
- Car maintenance
Neglecting these can cause more harm than you think. Not having money to pay for these expenses although you make enough is a sign you’re either wasting too much money or not saving enough.
If you neglect dental care, you can start having serious health issues. Having your car break down every now and then is stressful and may put you at a risk in traffic.
It is in your best interest to invest in your home and health, and if you can’t, it’s a sign that you’re managing your money wrong and might need to rethink your habits.
You Are Always Stressing About Money
Managing finances is one of the most stressful aspects of most people’s lives. This can lead to chronic stress that can result in a myriad of other health issues such as:
- Heart attacks
Apart from this, chronic stress can seriously affect your life. By taking control of your finances, you will be getting rid of stress but also living a much better life. Achieving financial stability will help you get your physical and emotional wellbeing back on track.