At some point or the other in life, people face certain situations which make them wonder whether their financial life is heading in the right track or not. They become apprehensive about whether there is growth in the near future or they are standing on the verge of a great financial disaster. In case the financial life is in jeopardy, one needs to take charge of all their financial matters, while there is still some time left, and make the required changes before it crumbles and destroys everything beyond retrieval.
With the economy experiencing constant ups and downs and people being bombarded with a huge workload and tight deadlines, one hardly gets the time to deal with their trembling financial life. There are a lot of people who, despite being in a state of an economic plight, live in a state of denial and overlook the fact that they need giant leaps to return to the forefront. They tend to become complacent with their present situation and believe that somehow their financial condition will improve with time. This clearly emphasises the need to have a look at some simple indicators that can present a clear picture of an individual's financial life. The more these simple pointers are true, the more the financial life of a person is at risk.
Not Enough Funds to Survive 3 Months without a Job
The first and one of the biggest signs of a terrible financial life is that an individual cannot survive for more than 3 months in case of a job loss. If a person has been working for years now, there should be an income worth at least a year saved in the account for dealing with such unfortunate situations that come without any prior notice. Sadly, this is not the case with a majority of working class people. Their monthly expenditures usually exceed the income, which leads to negligible or zero bank savings. What's even worse is that in case of zero savings, people are forced to live on borrowed money, which leads to piling up of credit card or personal debts and negative bank balances. Such cases bespoke big financial trouble and require one to make some quick moves to save for the future.
Higher Paying Job is a Distant Dream
Job is perhaps the only means that help a common man bring in a decent amount of money every month. Every year, or ideally after two years, a person should be able to climb up the ladder and reach a higher paying hierarchical position in their company. However, despite the years of knowledge, skills and experience, if a person doesn't climb up the professional ladder, the amount of money required every month will not increase, but sadly, the inflation will. This indicates a big financial trouble and implies the need to find a better job by increasing the level of skills and knowledge to make things flow smoothly in the near future.
EMI Payback for Depreciating Assets
Basically, there are two different kinds of debts namely, the good debt and the bad debt. Any kind of debt, which helps an individual in building personal assets and multiplies in terms of value over a period of time, is considered good. This doesn't suggest that one should opt for this. At the end of the day, it is a debt, but slightly better than the bad ones. The bad debts are the ones that are primarily used for the purpose of consumption, for instance credit card debt, personal loans and other similar ones. They are just another means of disbursing income to the outsiders regularly and that too, without building any kind of long term assets. If an individual is earning money just for the purpose of paying others and not building any assets, it is better to stop it now and look out for directions to change the course of life and get back on the right track.
Most people have a bad financial life and since it is not affecting them in the short run, they simply choose to overlook the trouble. Every other bad choice made in this direction does not affect the next day, but only worsens the situation for the future. Therefore, it becomes imperative to measure one's financial life on the basis of the aforesaid pointers and adopt a changed game plan for being better prepared for unforeseen situations that might arise in the future.
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