Bad Money Habits: You Need to Take These Red Flags Seriously

This is a very common scenario in the world of personal finance that people often ignore the red flags that warns and suggests them that their financial situation is unstable and susceptible to collapse. However, you must understand that you must note the occurrence of red flags as the first alarm of bad money habit that can lead to dire consequences.

Always being on the lookout for the following red flags will not only signal you that your finances are in disarray, but will also save you from major problems.

Having Revolving Balances on Your Credit Card:

Never take your credit card bills lightly. People, who fail to pay off their credit card bills in full each month, by definition, are in violation of one of the 10 commandments of personal finance. Which points out that they spend more than what they earn. As a result they are more susceptible to defaulting on their obligations down the road.

If You Were Turned Down for a Loan:

According to finance investment companies in Delhi, India if you were turned down for a loan, it’s not at all an episode to overlook with ease. It’s a sure sign that you are already running out of money and that your debt-to-income ratio is not as reliable as a lender would expect it to be.  

You Are Unable to Control Your Spending Behaviour:

This is one of the most alarming red flags because it indicates that although you are aware of your bad personal finance habits, you are unable to control it. Also, this may lead to other problems like fighting with your spouse as financial troubles often lead to domestic trouble.

Borrowing From Your Family & Friends: 

The necessity to borrow from your friends and family is another alarming situation that not only sows the seed of discontent, but also bring you under the risk of facing more dense problems in future due to bad money habits.

Not Having an Emergency Savings Account: 

If you are living from paycheck to paycheck ignoring the importance of having an emergency account, then you are doing a fatal mistake. According to finance investment companies in Delhi, India not having an emergency savings account with at least three months saving expenses means you can be completely derailed by even the most modest unexpected expenses, such as the need for covering medical bills.

So, here’s the list of five most important pointers, if you find yourself participating in two or more of these practices, then you are recommended to get your financial house in order as soon as possible before an irreversible problem strikes you in the future.