What are the warning signs of financial instability? Here are the top 10 indicators. If you are a victim of one or more of them, start taking the initial steps towards regaining financial stability when you finish reading this article.
- Borrowingto Make Your Budget
Your income should be sufficient to enable you to cater for your needs for a longer period. These include rent, food, and transport. Borrowing when working on a tightly stretched budget is a welcome idea.
However, if you find yourself in a situation where you have to borrow money frequently for three or four months to fund recurrent expenses, it could be a sign of trouble in “paradise.” Debt is cumulative in nature and your finances weaken each time you borrow. Installment loans can save you the mess while still struggling to attain stability.
- Losing Sleep overFinances More Than Occasionally
Everybody goes through some degree of financialstress. There is no exemption in this case since people with a solid financial situation too can also worry about sudden expenses or the effects of rising costs inthe future. However, if yourstress originates from your incapability to pay your bills then it is likely to signal financialinstability.
It is advisable to seek the services of a financial expert if this issue persists. An expert can suggest possible solutions to your financial problems.Installment loans can also be a viable option if you wish to get quick money to clear your bills and resume your sound sleep.
- Non-Existent or Close to Empty Emergency Funds
As the name suggests, an emergency fund is solely meant to cover unexpected financial disasters. Emergencies such as an accident or losing your job greatly affect your ability to work. If you lack an emergency fund to overcome these disasters or cover a minimum of 30 days of living expenses then you are heading towards financial instability.
The risk involved is that any large, unexpected expense could throw you into a downward financial spiral. You can lag in your debt payments and mortgage and find yourself unable to recuperate. If you didn’t have an emergency kitty, try setting up one as soon as you can.
- Being Broke After Paying Bills
It is not only a question of managing to pay your bills each month but also remaining with some cash for personal upkeep.Irrespective of the nature of your budget, you should always have a little extra cash to put into savings for future contingencies. If the extra does not exist then it indicates an upcoming financial crisis.
- Avoiding Money Discussions
As a defensive technique, it is normal for you to avoid discussing subjects you consider “disturbing”. These discussions could be between you and your friends, workmates or even your spouse. But what can make you avoid a discussion on finance? Your guess is as good as mine, poor financial health.
- Delaying or Eliminating an Important Project
The planned project can range from replacing your car, to the roof of your house or replacing your TV. The key reason for failing to accomplish your project is obviously lack of funds. In the worst case scenarios, it can take the form of delaying a medical procedure or your child’s education. The demands for such projects can be too high to be managed without some extra cash.
This is a clear indication of a financial crisis because you cannot delay such important projects if you have the funds. Did you know that online installments can be the perfect solution to your financial misery in such a scenario?
- Fantasizing About Having Better Finances
Having better finances is everybody’s wish. You need to have a good strategy in order to achieve this fate.What message does fantasy relay? It is like a wish without any practical effort. You can fantasize about getting a huge bonus, landing a high paying job or winning a lottery but it all narrows down to one reason-financial instability.
- A Recent Credit Denial
The whole economy relies on credit hence getting a loan is always an easy process. But if your recent credit request was turned down then it clearly displays your low financial status.The lending system views you as “damaged goods” and is afraid of taking the risk on you.
Another instance is when you get a loan but it falls into the sub-prime category which is the last stop before the ultimate credit denial. When listed in this category, youwill pay additional fees in addition to ahigh interestrate. This is a clear contrast to installment loans which provide a favorable environment for loan request and repayment.
- Maxing-out on One or More Credit Cards
This is a classic sign of impending financial instability. A maxed-out credit card is a liability because it is not a source of fresh credit despite representing an ongoing monthly payment. There are always no good reasons for maxing out credit cards and you can easily go on to max-out other cards after the first attempt.
- Dropping Credit Scores
Your credit score tracks all your credit records. An increasing credit score is an indication that you are using your debt wisely. However, if the reverse happens then it is a sign of a looming financial crisis. The ratio of your debts to your available credit should never go beyond 30% otherwise you risk being financially unstable.
Online installment loans can be a perfect solution for you. An installment loan provides the qualified customers with a longer loan repayment period, larger loan amounts and a personalized repayment schedule. Loan amounts and availability vary from state to state in the US.
If you experience any of the signs outlined above, take an immediate action. Being financially unstable is not an end to life but simply a condition you can handle. But before that, know the signs and be prepared to act.