Managing Personal Finances – 6 Sure Signs That You’ve Got It All Wrong

The surest way to solve a problem effectively is to first identify its cause.

When it comes to managing personal finances, this not only involves looking at the symptoms, but also taking the time and effort to find out why those symptoms are showing up in the first place.

Problems related to managing personal finances usually manifest very shortly after clear symptoms of poor money management, some of which may not always be that obvious.

In this article, we will take a critical look at six symptoms of poor money management that you may be experiencing, which will reveal the extent to which you are having trouble managing your personal finances.

1. No matter how much money you earn, you do not seem to be getting ahead

If you feel as though you are on a financial treadmill that keeps going faster than you can keep up, especially after an increase in pay has proved to be of little use, something is clearly wrong.  Experts agree that there are two ways to deal with such a situation.  Increase your income or reduce your expenses. I believe you have to do both at the same time.

2. You somehow find yourself buying high-priced items on impulse

Research has proved that our buying decisions are based on emotion and justified by logic. To avoid feeling guilty, every time you impulsively buy an expensive item, you will give yourself reasons as to why you made the right decision.

Until you are able to deal with your emotional attachment to items you would like to purchase (especially the high-priced ones), this symptom will develop into an even bigger problem… bad debt.

3. All you have to show for years of hard work is debt

This is one observation many people prefer to ignore, hoping it will go away ‘somehow’. However, the sooner you realize you are headed in the wrong direction from a financial standpoint, the easier it will be for you to make a detour.

You can never spend your way to financial success.

If you often spend your salary long before you receive it, or you find that pay day loans are a regular need to help you stay afloat, managing personal finances is something you need to take seriously.

4. You have a stack of unused items or unopened packages

Do you have items around your house that you purchased more than 3 to 5 months ago that you have never used, leave alone opened the packaging?

If you do, you are actually tying up your money in non-essential items, and soon you will start to wonder where all the money goes.

Furthermore, if you buy items on credit, you may find yourself paying for things you bought a while ago that you no longer own for one reason or another.

The most likely cause of this is opting to buy something you don’t need than risk the chance of losing out on an ‘opportunity of a lifetime’.

5. You notice items on your credit card statement or bank statement, that you don’t remember buying

The fact that you even analyze your credit card or bank statement tells a lot about your money consciousness.

However, if there are entries of purchases that you don’t remember making and you are afraid to approach the credit card company or Bank to confirm that you actually made those purchases, you need to start taking charge of your personal financial matters.

6. You find it hard to resist spending the money you have in your wallet or purse

In short, you can’t trust yourself when it comes to money. Are you comfortable and relaxed around money? Strange enough, most people are not. When they receive it, they get very agitated and embark on a mission to get rid of it as quickly as possible.

If this describes you, you have to work on improving your relationship with money.

The way you react to symptoms of a bigger problem speaks volumes about your ability to find a meaningful solution. For instance, clearing garage space to stack purchases you have never, and may never use is a short-term solution to a long-term problem.

Managing personal finances is not as complicated as it sounds.

If you are having trouble getting started, click here to  download my FREE report Money Management Made Easy,  and get instant access to insider money management tips.