5 Signs You Might Be Going Towards A Financial Disaster

It feels terrible to be hit with a financial challenge that you never saw coming. You could have the best of intentions when you try to manage your money, and you could still end up in a financial disaster if you’re not careful. The best way to avoid it is to know the warning signs so you can change course if you happen to be on that path. Those warnings signs are explained below:

Living From Paycheck To Paycheck

Most people know the feeling of money going out as soon as it comes in. If that happens with all of your money, then you have no safety net for unforeseen expenses. If you miss work and don’t have sick pay or your job shuts down for a little while, that will be enough to make you scramble to cover the usual bills. People who had their jobs shut down during the COVID-19 experienced this.

Having To Use Money You Saved

Financial specialists recommend having six months’ worth of bills put away in savings. That way, you could continue to pay off your bills if something happened to your job or you became too sick to work for a short amount of time. The point of savings is to have it sit there so you can use it if you need it. However, if you are being forced to take money from your savings just to cover your bills, you may want to look at your spending.

You Are Paying Late Fees

If you normally find yourself paying late fees, then you are not making enough money to pay your bills, and you need to find a way to increase your income. Late fees are not small, so if you find a way to pay your bills on time, you could put money that would go towards late fees into savings, so you start building a safety net.

You Are Turned Down For Credit Cards

You might be getting plenty of credit card offers in the mail claiming that you have already been approved. So you fill in the required information when the bank gets back to you; they reject the offer you thought you were already approved for. Banks look at a few factors which will influence their decision of accepting or rejecting you.

First, banks check your credit score. Even though a perfect credit score is 800, most banks won’t have anything to do with you if your credit score is under 650. If your credit score is above 650, they want to make sure you have a Savings and Checking account, so banks know they will get paid back for the credit they allow you to spend. Banks will also want to see that you have a regular income stream as well, which they will see if you are normally depositing your checks from work in the bank accounts that you admit to having. If you satisfy all these conditions, then you will be approved.

So if you are being rejected constantly, you want to pay attention to the reasons for rejection because many banks will tell you why they didn’t feel like giving you a credit card of any kind.

Your Credit Cards Are Always Maxed Out

Having multiple credit cards will not hurt your credit score. However, if your credit cards are always maxed out, then your credit score will suffer as a result. Some people fall into the trap of having a maxed-out credit card by paying only the minimum payment required every month. If you pay the minimum payment every month with nothing else, then you run the risk of never paying off your bill because of the interest that keeps adding up. Even if you do eventually pay off your bill, you will pay hundreds or thousands of dollars in additional interest before you pay off the credit card. That’s why if you use a credit card, you have to make sure it does not become maxed out.


These are the ways people fall into a financial disaster without realizing it. If you can keep these things from happening, then you will be better prepared than most people. We may be experiencing one of the most stressful financial times in history, but knowledge can keep a stressful time from turning into a financial disaster.


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