It can sometimes be hard to tell if financial problems in a home are truly out of control. There are a few indicators, however, that can help to clarify whether some type of outside help is needed to resolve problems with spending and debt.
There Is Never Enough Money
An obvious sign that personal finances are out of control is when there is just not enough money each month to fully pay all of the bills that are due while also being able to afford basic necessities. If a choice between buying food and paying a utility bill has to be made each week, then there are definitely financial problems in the household. Depending on the situation, a budget might be able to help bring finances back in line.
Bill Collectors Keep Calling
Collection agencies and credit card companies call aggressively when payments are not made on time or are not made in the correct amount. A bill might be going unpaid because there is not enough money. It is never good to just ignore bills and collection calls because the situation will only grow worse over time. Contacting a credit counseling service could help in some situations by reviewing the income and expenses for the household and making suggestions about changes that can be made to free up funds every month.
The Amount of Debt Never Decreases
If the smallest possible amount is being paid to credit card companies and utility companies each month, then the amount of money that is owed will never really decrease. This creates a cycle of revolving debt that is very difficult to break out of. Interest and late fees can actually increase the amount of money that is owed over time until even the minimum payments become unaffordable. Debt relief services can help to stop this cycle with tools like debt consolidation or debt negotiation.
Consistently Denied For Credit
A sure sign that personal finances are out of control is when an individual is consistently denied credit. This can be because of overdue payments or it can be because of defaults on previous loans or credit cards. In order to regain good credit it is important to take proactive steps towards resolving whatever problem is marring a credit report. Using credit repair services or even just financial counseling can help to accelerate the process.
Paychecks Are Spent Before They Are Cashed
If a household has no savings then the potential for disaster is looming at each payday. When paychecks are instantly spent it means that an individual is actually slightly behind on payments. Difficult choices have to be made so that some of the money that is earned every week can be saved. Living from paycheck to paycheck can be demoralizing. It is also dangerous since an unforeseen event can quickly throw a family into a financial crisis.
Reliance on Overdraft Protection
When money has been very tight in a home for a long time some people begin to rely on mechanisms that the banks provide for temporary support. If a person is relying on overdraft protection so that bills and other necessities can be paid, then there is a serious financial problem. Overdrafts can temporarily allow some extra immediate spending but negatively impact credit in the long run since the negative bank account balance is recorded.
Staying Afloat By Transferring Credit
Using one credit card to pay off another credit card is a sign that an individual is just barely able to stay financially afloat. Transferring credit from one card to another will only work in the short term. There will eventually be no new accounts to transfer the money to. Seeking the help of a debt relief agency is far more effective than attempting to juggle debt between credit card accounts.
About the Author: This guest article is from the editorial staff at CheckDepot.com — It’s easy to obtain a cash advance at the Check Depot.