Everyone knows it’s important to keep an eye out for red flags when you’re dating someone new. But have you ever thought about applying this skill to your financial relationships? The truth is that financial problems don’t usually crop up overnight. Often there are numerous early warning signs that indicate there may be trouble ahead. That’s why we’ve put together the 5 most common red flags so that you can avoid a messy break up with your finances.
01: Keeping debt a secret from those closest to you
Have you been putting off telling your partner about your debt or taking out new lines of credit in secret? Often people believe they’ll be able to deal with debt on their own without their loved ones finding out. However, usually, this only makes the problem worse further down the line if they find out. Remember the first step to tackling your debt problems is acceptance. So, try to be as honest as possible about your debt, both with yourself and your partner.
02: You’re unable to pay off your credit cards each month
Credit cards can be a great way to borrow whilst also improving your credit score. However, this is only the case if you’re able to pay the balance in full each month. The ease of spending on credit cards makes it all too easy to overspend on a couple of extra purchases each month. High-interest rates mean this can quickly snowball into unmanageable debt. Therefore, it’s essential to stay on top of your credit card debt and only use it for emergencies. If you’ve been unable to do this over the last few months, this could be an indication that your finances are under strain.
03: You’re unable to save any of your income
We understand how difficult it can be to save, especially around this time of year. However, if there’s one thing we’ve learnt from the pandemic it’s that life doesn’t always go to plan. Therefore, it’s a good idea to have something to fall back on in case you hit an unexpected bump in the road. So, if you’re struggling to think of a new year’s resolution, why not open a savings account and deposit some of your income into it each month? If the idea of this is simply unthinkable for you at the moment this could be a sign you need expert help with managing your debts. Get in contact with our friendly advisors to find out if an IVA could be right for you. This could help ensure you pay just one affordable monthly sum towards your debts and stop creditors from chasing you for payments.
04: You’re using payday loans for essential purchases
Payday loans should only be used as a last resort for an emergency source of cash. This is because the high-interest rates and fees mean that you’ll often end up getting into a lot more debt than the original loan. Therefore, if you’ve found yourself relying on payday loans for everyday purchases this could be a major red flag for your finances.
05: You’re often late making your payments
Everyone makes the odd slip-up from time to time and forgets to pay their phone or insurance bill. This is completely understandable. However, if receiving reminders about late or missed payments from your creditors is becoming a regular, monthly occurrence this could be a sign that it’s more than a mistake. So, if you’ve been struggling to make payments for over 3 months then it could be a good idea to reach out for help now.
By: Maggie Elliott
