In this series I am covering the 24 tell-tale signs that you could be in financial trouble. Over the next few weeks I will be presenting these signs, how to identify them and tips on how to address the issue.
As I conclude this series I wanted to save the most important sign for last, and that is simply ignoring any of the other signs. For many people they realize that there is some sort of financial problem in their life but no action is ever taken to try and correct the problem. This is especially common when the problems stem from debt or a lack of income that makes it hard to save money or even pay bills. It is easier to put your head in the sand and hope the problem goes away by not thinking about it. Trust me, it won’t.
Recognizing the Problem
Recognizing the problem is the easy part. We all know when we have a bill that is late or a credit card that is maxed out or even the fact we aren’t saving anything for retirement. The problems themselves are are not too difficult to identify. The trouble comes after you identify the problem and you realize you don’t have an answer as how to resolve it so you start to ignore the problem. Over time this problem becomes nearly invisible to you and it simply becomes a part of life.
If you have identified a problem you need to take action to resolve it. Ignoring it won’t make it go away and will likely just make things even worse. Unfortunately, taking this initial step towards a resolution is the most difficult thing to do. For many people it is difficult because there doesn’t appear to be an answer. If you are swimming in debt and can hardly keep up with your minimum payments you look at this problem as if there is no possible way out.
If you don’t know the answer for resolving your financial problem don’t stop there. Take a moment to seek help in finding the answer. There are many resources available both online, in print and in person to help you in almost any situation. But you have to remember that these problems won’t go away on their own and you need to take control of the situation if you want it to improve.
Inaction is Worse Than the Wrong Action
Sometimes we realize we need to take action in order to resolve a problem but we fail to initiate the process in fear of making a mistake. Maybe you want to start putting 10% of your money into a retirement plan but you aren’t sure of what investment choices to make. Or maybe you want to increase your payments on your credit cards but you are afraid this may hurt your monthly cash flow. This way of thinking is only a form of procrastination that you have created a justification for.
Unfortunately by not taking action or by delaying the action you are probably doing more harm than if you just begin even if it may not be the optimal solution at that time. This is especially true whenever there is compounding involved. It doesn’t matter if it is the compounding interest in a savings or investment account or the compounding nature of your interest on your credit card balances. Time is very important in these instances and once time is lost you can never get it back. It is one resource that you cannot create more of or change.
Review Your Situation
I challenge you to go take a look at the complete list of the 24 signs right now and identify which ones may apply to you. Jot them down or print off the list and circle each one. Then I want you to determine why this problem has occurred in your life and for how long it has been going on. Be e honest with yourself because it is important to not only identify the problem but to realize how long it has been going on and how it came to that point to begin with.
Once you have identified the problems that apply to you I want you to take one step in an effort to improve the situation over the next week. You don’t have to resolve the whole issue at once, but just make an honest effort to change it. These things don’t happen overnight and don’t expect them to, but by taking even the smallest step now will put you on the right path. You will slowly begin to improve your financial situation and also start to feel better about it as well. Once you begin to see the progress being made you will have the motivation to do more and before you know it you are in command of your finances.
Knowledge May be Power but Without Action it is Useless
You can read every finance book ever written, you can study the stock market until you have company data memorized and you can know the tax code like the back of your hand but without taking action that knowledge is just useless trivia occupying space in your head. Just because you know what you should be doing isn’t enough, you have to actually do it. It is important to gain knowledge and to learn what is necessary in order to improve your finances but unless you take that next step and put that knowledge into action you will never make any progress.
24 Signs That You Could be in Financial Trouble
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Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.