4 Signs you need help managing your money
Is your bank account constantly overdraft? Do you regularly miss bill payments? Chances are you may need help managing your money. Similar to hiring a personal trainer to get yourself into shape at the gym, when it comes to your money, consider hiring someone who’s qualified to handle it. Money coaches and fee-only financial planners are a good start. Here are four signs you may need help with your money.
Your bank account is constantly overdraft
If your bank account is constantly in overdraft, chances are you need help managing your money. Overdraft is when you withdraw more money than is in your bank account and your account balance goes into the negative. Unfortunately, most financial institutions charge a fee for each day your account is overdraft. And those charges can quickly add up.
How can you avoid going overdraft? By paying better attention to the money going in and coming out of your chequing account. Going into overdraft doesn’t necessarily mean you’re overspending. It might just mean you’re not doing a good enough job keeping track of your money.
Instead of spending money on overdraft protection, if you can afford it, keep a spare $2,000 in your chequing account to cover you in case you forget about writing a cheque, or an upcoming automated bill payment.
Regularly missing bill payments
Regularly missing bill payments is another sign you may need a helping hand with your finances. Missing bill payments can be costly. Not only can you face extra fees and interest, it can negatively impact your credit. If you own a home, missing your mortgage payments can result in paying higher mortgage rates upon renewal.
Figure out whether missing your bills is due to not being organized or living beyond your means. Create a budget or use a budgeting app like Mint to keep track of your inflows and outflows of cash. This practice also allows you to see where you’re spending your money. When you add up your spending at the end of the month, you may discover you’re spending $150 per month on Uber. This can be an eye-opening experience and motivate you to get your finances in better shape.
Your credit card is declined
Credit cards are a powerful financial tool when used responsibility. But you can run into trouble when you abuse them. If your credit card is declined, it’s a clear sign you need help managing your money. Likewise, if you’re using credit cards to pay off other credit cards, you should probably seek out help from a credit counselor, fee-only planner or money coach.
Living paycheque to paycheque
Living paycheque to paycheque is a clear sign you need help managing your money. Being one paycheque away from financial disaster is no way to live. Again, it may all come down to budgeting. By preparing a budget and tracking your spending, you can account for every single dollar of spending and see where your money’s going and find opportunities to save.