You may not be in debt today, but could you be tomorrow? Just as some people have a greater ‘ease’ of getting fat, others may have a ‘tendency’ to get into debt. Rest assured that everything can be changed in this life so that everyone can get out of this area of risk. But, it is important for you to consider whether you are in this group of people prone to debt.
Let’s list below some behaviors or signs that indicate you are more likely to get into debt. Some are already old acquaintances, but always worth reinforcing!
Remember that even if you fit in with many of them, that does not mean that you are bound to drown in debt. But it is a warning that it is ideal for you to change your behavior to further improve your Personal Finances.
1. Do you have an Expense and Revenue Control, or do you have some kind of Home Budget?
Unless you are under 10 and only receive allowances (and yet there is controversy…), there is no other way out: you have to do some kind of budget control. This is critical to understanding if your spending is higher than your income, where you are spending more, where there are savings opportunities, and so on.
If you do not have such a control, the chances of you spending more than you can increase and therefore you are more likely to get into debt.
Even if you currently have balanced accounts and save money every month, this does not exemplify you from having financial control: do something, even if it’s a simple one. This is the same as exercise: you have to do it regularly, and the results will come in the medium to long term!
2. Are you a compulsive consumer?
We can all identify those people who are very consumerist: they can’t resist good promotion or market news, buy what they don’t need, and end up with many unused products.
But it’s often harder to do a self-assessment! Are we compulsive consumers? If you have questions, ask someone to give you a sincere opinion about you. And there’s no point in disagreeing or arguing if you are classified as an “uncontrolled spender”!
In general, those who cannot control consumerist desires properly tend to have more debt problems. The reason for this is obvious, but most importantly you become aware of this type of behavior.
Again, this is necessary even if you do not have debt problems: you can save much more if you can contain the consumption impulse.
3. Do you have any contingency reserve?
We have already talked a few times about the importance of having a saved amount that would be a reserve for the many unforeseen events in our lives (some serious health problem, a temporary loss of job, etc.). Without it, you will have to borrow in case of an unplanned event that requires extra money.
And, depending on your financial condition, this loan may be the beginning of the process that will lead you to an exaggerated debt.
We are almost all optimistic by nature, but we must also learn to be not only cautious but primarily responsible for our financial situation.
4. Do you think about your retirement?
Having a healthy concern about retirement is a great motivation to keep finances balanced while we are young.
It sounds easy but it is not: Not everyone can give up more immediate satisfaction in the present to ensure a peaceful future.