How can an individual know if he or she is in need of financial help? Sometimes the signs are unclear unless the situation is dire. Financial problems may sneak up on unsuspecting individuals. Everything might be going well when, all of a sudden, an event such as a job loss causes a person to realize he or she wasn’t financially prepared for lack of income. This article discusses several scenarios in which a person’s money management should be closely examined.
Signs of Mild Financial Problems: When to Employ Money Management Techniques
Mild indicators of money management issues may not even look like warning signs, but they still indicate that a person could benefit from a financial checkup. Here are three indicators that someone may not have financial matters in order, even though everything may currently appear okay from an outsider’s point of view (and potentially from that person’s point of view, if finances are being ignored):
1. They regularly earmark money for future expenditures before that money is earned. Doing so in a responsible way may be okay if the purchase is carefully considered and truly necessary. Repeatedly slating unearned money for future expenditures without taking into account unforeseen future expenses may not be a good idea.
2. They don’t have any savings, but still go shopping regularly. To an outsider, this person looks like they are financially fit because they always have money to go shopping, but the reality is that he or she may spend every penny earned and may not have a rainy day fund in case of emergencies.
3. They don’t know how much money they have in their checking and/or savings account. A financially fit person should always know how much money (at least a ballpark range) is in each account. A lack of this knowledge represents an undoubtedly overall lack of knowledge about personal finances.
Anyone who can identify with one of the scenarios above may not need immediate financial help, but may benefit from a close examination of personal finances. Creating a budget and employing money management techniques can go a long way in turning around personal finances. Debt management may also be in order for those who have racked up credit card bills along the way.
How to Get Financial Affairs in Order: Start with a Basic Personal Budget
Putting together a basic personal budget is a step in the right direction. Personal finance software contains budgeting resources, but a budget doesn’t have to high-tech. Start one on paper or in Microsoft Excel. Also, consider visiting the Smart About Money website; it’s a great resource for anyone who wants to develop a budget, learn money management techniques, and reduce debt. It is a website run by a nonprofit organization dedicated to improving the financial well-being of individuals.
