Believe it or not, there’s a thin line between being financially solvent and in financial distress. If you’re not careful, you could slip over that line. How can you know if you’re flirting with a financial melt down. Here, according to the website Bankrate.com are seven signs that you may be skating on thin financial ice and need to look into debt settlement.
Late fees or juggling bills
One sign that you’re in financial peril is if you constantly have to pay late fees or juggle your bills. If the reason why you’re paying late is because you can’t pay on time would be a clear signal of financial problems ahead. On the other hand, if you’re not making your payments on time because you’re lazy then you’re just throwing money away on late fees.
Relying on a financial windfall
If you create your financial plans built around a potential windfall in the future such as an inheritance or a bonus, this can put you in deep financial trouble. What you’re doing is rationalizing your debt. If that bonus doesn’t materialize or that inheritance doesn’t come through, you could take a big financial hit.
Making just the minimum payments
Credit cards can be a very useful tool and even earn you money in the form of cash back or travel rewards. However, if you find that month after month you’re just making just the minimum payments, your debt is growing and will continue to rise. Another sign of financial trouble ahead is if you’ve shifted your balances to a new card more than once.
Do you continually have to pay overdraft fees? If so, you could be on the near edge of a financial catastrophe. When you are constantly receiving notices of nonsufficient funds (NSFs), this is like a flag signaling a hurricane. If this is you and if you don’t have the money necessary to just cover your checks, you could be close to declaring bankruptcy.
If you have no savings or a very small amount of savings, you have nothing to tide you over in the case of a financial emergency. Saving should be treated as an expense and as part of your budget. If you don’t have an adequate amount of savings and do run into a financial emergency, you’ll just have to pile more debt on your credit cards or take out a personal loan – either of which could drag you down into debt hell.
Borrowing from your retirement savings
Borrowing money once from a retirement account such as a 401(k) can be a bad idea to begin with. If you find that you have to tap into that account more than once, this would be a definite danger sign. This means you are not only living beyond your means but you’re stealing from your retirement, which could have very bad consequences. Any money you take out of a retirement account is money that’s not growing as an investment.
Using your home as a piggy bank
Using the equity in your home can be a good thing, depending on what you use it for. For example, if you were to use your equity to pay off high interest credit card debts and if you can pay back money within a few years, this could be a good option. However, if you’re paying for something such as a vacation with a home equity loan, you’re actually amortizing that expense over as many as 15 or even 20 years. In short, you should not tap your home equity except for very valid reasons.
Better look into debt settlement
One way to stave off financial disaster it is by hiring a company to settle your debts. Professional debt settlement companies such as National Debt Relief have helped thousands of families reduce and consolidate their debts and become free of debt in 24 to 48 months. Don’t let debt rule your life.. Check into debt settlement today.
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