Managing finances for your prolific future is probably the most intricate job of life, but at the same time, it can help you grow your wealth. Seeking guidance from financial planners is the most worthy approach towards a better budgeting. Savings in life plays a significant role in perking up the way of living. Thus, it is very important to keep a track on your financial position. To help you do so, we have listed here six signs that reveal your worsening financial stage.
Your Balance in Savings Account is Nil
According to financial planners, you must maintain sufficient balance in savings account so as to bear the living expenses of at least three months. However, it is always worthy to have minimum of twelve months in account. If you do not have savings, it would be really difficult to clear bills as and when your car collapses or bear the expenses of emergency room during an unexpected trip. The situation can become more perilous if you will put your expenses on credit card with high interest rate and fail to pay it for long.
Payment of two overdraft fees a year
While an occasional payment of more than one overdraft fee does not makes situation worrisome, but one must avoid its repetition. This shows that you are spending on the line of what your salary can afford.
Use of credit cards even for the payment of small bills
Credit card serves a convenient way of paying off bills, but this does not mean that you should shred its balance immediately. One must avoid the payment of small bills using credit cards, as it can increase your debts that mean you have to pay more in interests other than bill.
Spending more than the credit card limit
Expenses in excess of credit card limit can definitely upset your credit score, thus using 25% to 30% of card limit can trim down your credit score. And, the worst part is that you will be required to pay over-limit charges by the time you receive your balance back.
Planning to win lottery for retirement
If you are purchasing each possible lottery with a hope of big value, then you are certainly on the wrong track. It is not compulsory that your luck will always work and bring good charm, this is the reason why it sounds quite ridiculous to depend upon your luck for retirement planning. It is much better to put up a plan for handling finances and saving a subsequent amount of money for retirement.
Borrowing amount from 401(k) for paying bills
Needless to say, 401(k) is your own money and you can use it anytime, but it can be of great use during retirement years. If you are paying electricity bills or orthodontist bills of your kids from 401(k), then you are utilizing funds in wrong way. Even the experts suggest you to secure a part of your hard-earned money for future requirements.
If any of the aforementioned signs seem to be true, then it is time to take action and face the facts. As, this can help you move on the right track and secure your future from uncertainties and financial deficit.
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