Are You One Paycheck Away From A Financial Disaster?

Have you ever thought about how long you would not only survive but also thrive financially if you were to lose your paycheck?

This question makes many people uncomfortable, especially if the answer is nothing short of a situation that would spell financial disaster.

For those who have never thought about the implications of relying on a single paycheck, a thought process is initiated usually without any form corresponding action, implying that it is a bridge to be crossed when they get to it.

Here are five indicators that you could be one paycheck away from financial disaster:

1.  Although you are paid on a monthly basis, payday takes too long to arrive

If you are on a regular pay schedule and you find there is too much time between one paycheck and another, this is a clear sign that you are spending more than you earn.

As a result, you get the feeling you are not earning enough money and you will devise means to bridge the gap usually by borrowing, which aggravates the situation.

2.  Saving money is a serious challenge for you

If you find saving money a difficult task, you are unlikely to have any savings.

Spending all the money you earn exposes you to the risk of perpetual financial struggles, and without any savings, it is difficult to shield yourself from financial hardship once you stop earning.

Savings are a safety net that can provide you with a means to support yourself should you lose your source of income, irrespective of how much you earn.

3.  You are using tomorrow’s income to pay yesterday’s bills

This predicament can be summed up in one word. Debt.

Having to rely on an uncertain future income like a paycheck to pay for products or services you consumed yesterday is a dangerous way to live.

You will always find yourself working really hard, sacrificing precious time with your spouse and your children, yet still not earn enough money to make it worth the while.

Once you stop earning, you may not be able to stop spending and your debt problem will only get worse.

4.  Spending more that 70% of your income on basic necessities.

This is a clear sign that you are not earning enough money, and until you find other sustainable means of supporting yourself and your family, you will be at the risk of financial disaster should you lose your paycheck.

Aim to spend no more than 15% to 20% of your income on basic necessities, so you can build a savings base to serve as a platform for investing.

5.  Investing is something you haven’t got around to doing (as yet)

If you have earned money for a considerable amount of time, there is no reason why you should not have any investments.

It is all too easy to keep busy at work without doing anything meaningful, yet lack the solid satisfaction of knowing you will have sufficient investments to meet your demands in old age.

Years of smooth financial sailing are best utilized by investing, so you can live off the income from your investments.

Don’t wait until you are unemployed to start thinking about understanding how money works, and learning how to take full control over your money.

To help you get started, click here to download my free report ‘7 Things About Money You Should Have Been Taught In School’ and discover how to get your money under control, even if you are a complete beginner.