5 SUBTLE SIGNS YOUR PERSONAL FINANCES ARE A MESS AND NEED REVAMPING

Let’s start face some of the real facts about money. Money is what’s striking fear into the hearts of the average adult. A good number of people are losing sleep because of financial anxiety and other worries related to personal finance. Worries about personal finances, including fear of experiencing a financial emergency, losing a job, or a long spell of unemployment, is negatively affecting people’s health, happiness, and careers.

People are right to be concerned. The typical Ugandan’s financial situation isn’t exactly rosy even if they are actively working in the corporate world. Many are up to their ears in debt, and a good number of them are living paycheck-to-paycheck at least some of the time. A significant number of us seem to be one short step away from financial disaster. Worse, we seem to be unwilling or unable to do anything about it.

Though money fears may be giving people anxiety, changing bad financial habits is hard, especially when you don’t realize exactly what you’re doing wrong, or don’t realize how serious the problem is. People who overspend and don’t save enough “often don’t realize how much harm they’re doing to themselves until the worst happens,” financial advice columnist Michelle Singletary wrote in the Washington Post.

Often, the warning signs you’re headed for a financial train wreck are there long before the disaster arrives. If you can spot the flashing yellow lights, you can clean up your act before you run completely off the rails. Here are five subtle warning signs your personal finances are a mess.

1. YOU’RE NOT SURE WHERE YOUR MONEY GOES

You make a good salary, but somehow, you’re still broke at the end of every month. Feeling like your money is pulling a disappearing act is a bad sign, but not an uncommon one. Many people resist taking a closer look at their spending habits because it can bring up feelings of guilt, remorse, shame or frustration but the reality often needs to be faced off.

HOW TO FIX IT: It’s time to start tracking your spending. Personal Finance Apps, a simple excel sheet or your bank account’s statement make this easy. You can look at your transactions over a month or two and see exactly where the leaks are as you total up how much you spent at restaurants or on random purchase on Jumia. Once you realize where your money goes, you can prioritize your spending, pay down debt faster, save more, and achieve your financial goals more quickly.

2. YOU CUT BACK ON NECESSITIES TO BUY OTHER STUFF

You just had to have that designer dress or shoe, but now you’re eating instant Rolex for dinner for a week straight because of your desire to show off. If your spending on travel, eating out, and other “nice to have” stuff is making it difficult to cover the basics, like groceries or retirement savings, your priorities are out of whack.

HOW TO FIX IT: Budget, budget, budget. Figure out how much you need to meet your essential expenses, including housing, food, transportation, and savings. Then, set a budget for your fun spending, whether it’s new clothes, dinner at Cafe Javas, or a spa weekend with your best friends. You’ll soon find you can enjoy the finer things in life while still being financially responsible.

3. YOU’RE SOMETIMES LATE PAYING YOUR BILLS

Many people who are seemingly employed don’t always pay their bills on time. Some of them might be juggling bills to make ends meet – paying the rent on time but putting off paying the UMEME until they are threatened a disconnection– but others are probably just disorganized. That disorganization costs you in the form of late fees and a potentially lower level of trust or credit worthiness. And if you can’t get it together to pay your rent on time or pay your debts on time, chances are you’re not doing a great job of managing other areas of your personal finances.

HOW TO FIX IT: Payment reminders and automatic payments make sure everyone from your landlord to your loan lender gets their money on time. When you receive an irregular bill, pay it right away so it doesn’t get lost in the shuffle. If it’s a cash flow problem that’s causing you to be late, see if you can adjust your due dates. You may be able to group your payments, so they fall closer to payday, or spread them out over the month if that works better for you.

4. YOU’RE PAYING OFF ONE DEBT WITH ANOTHER

If you find that you transfer pay off one debt through borrowing from another source, chances are that your finances are in a big mess. This is a state you don’t wish to find yourself in. This could be caused by the fact that you live way beyond your means. And debt transfers, while beneficial in some cases, are often the result of poor personal finance management like a lack of discipline to pay off the debt.

HOW TO FIX IT: Put your fixed loan payments on auto pay and organize your debts with a clear action plan to pay them off as fast as possible. Use either the snowball or avalanche method. Call your creditors to negotiate lower rates and create a customized payment plan if necessary.

5. YOU FREQUENTLY ASK FAMILY OR FRIENDS FOR MONEY

If you can’t afford an expense and must ask someone for a loan, you’re probably already in financial trouble. Using other people as a crutch hinders you from ever achieving financial security and freedom. If you don’t let yourself fail or say “no” to yourself, how will you learn from your mistakes and ultimately make better money decisions?

HOW TO FIX IT: Rather than asking family and friends for a loan, ask them to help you on your mission to achieve financial freedom. Ask for their guidance and plan to check in with them on a regular basis. Having an active partner in your financial freedom program will help you stay on track and accountable.

WOULD LIKE TO LEARN MORE ABOUT PERSONAL FINANCE MANAGEMENT?

I will be sharing about mastering personal finance management at the upcoming Personal Finance Mastery Workshop on 14/12/2019. Let’s organise our personal finances for 2020. I will help you to make clear plans for achieving your financial goals. Feel free to get in touch with me on 0772122994 or 0781819477 and we can discuss more. You can also send me an e-mail via [email protected] on matters of personal finance. I will be happy to respond.

Written by Darious Nkwasibwe

Financial Literacy Enthusiast and Trainer

0781819477 / 0772122994

PS: Have you registered for the upcoming Personal Finance Mastery Training? If not, hurry and do so. We will be discussing all matters of personal finance including savings and investment for beginners. Let your finances rock in 2020. You can register via this link https://forms.gle/KpERT1a1YecTxpZk9