Awareness of the condition of one’s financial life is very important. A person must be aware of the determinants of his financial life which show his financial life to be in bad shape. If you ignore it then it may lead to a financial disaster in future, Therefore, it’s advisable to prevent it and take proactive steps at the earliest.
In this article we present to you certain signals which will alert you so that you take proactive steps to overcome financial crisis.
Indicators to know that your financial life is in trouble | When you can’t live without income for 4 months
Income varies from wealth. There are many people who in spite of earning a good amount, struggle for basic expenses when they lose their job unexpectedly. The major reason is their inability to save money efficiently.
When you work, you should always save money which will secure you for at least 4 months. This is especially when you lose or switch your current job till you find a new one. When you find that you don’t possess sufficient money even when you earn then it points towards financial disaster. This is the first signal to tell that financial position is in bad shape.
Indicators to know that your financial life is in trouble | When you give high EMIs on depreciating assets
It’s always bad when you are incurred with too many liabilities. And it’s worse when your debt does not lead to appreciation of assets. Higher EMI outflow for example because of too many pending personal loans, debt on credit card & car loans is not a good sign.
Usually, total EMI spends should not be more than 40% of monthly income. Hence, realization of outflow of higher EMI on depreciating assets is another signal of financial trouble. Therefore, you should work towards improving your skills to become more professional and advanced in your career. This will present financial success in all aspects.
Indicators to know that your financial life is in trouble | When you spend a lot on social functions
There are many people in India who like to spend pointlessly on social functions, only to find themselves in financial troubles later when they don’t save prudently. Therefore, such spending habits should be avoided.
Indicators to know that your financial life is in trouble | When you work for long, but no valuable investments
When you have worked for at least 3-5 years, yet possess no assets then it’s also a signal towards financial trouble. Therefore, you should invest in fixed deposits or mutual funds & gold or other valuable investment options.
Hence, now you know that how to overcome financial crisis to lead a secured life by finding solutions to the signals of financial trouble.