23 October 2011

Are You Living On The Financial Edge

Not all of us are perfect managers when it comes to managing our personal finances. How often do we delay important bill payments, leave things to the last minute and scrape through deadlines. Living paycheck to paycheck and one payment will leave you in a financial mess, no money in your saving account, no sufficient emergency fund. Financial planning, budgeting and other aspects of managing money can be complicated and stressful to deal with.

Is the foundation of your financial life weak? Is it unable to withstand even the smallest changes and challenges? Let's take a look at the things or even situation that drags one to the edge of a financial cliff.

Depending On Debt To Pay Bills

Are You Living On The Financial Edge
Surrounded by a tough economy, most of us will be forced to get into debt to make ends meet. Living on a shoe string budget ain't fun. In order to pay the fulfill certain basic needs people opt for various options like availing a short-term loan, using credit cards to make small purchases and borrowing money from family and friends. Borrowing money might bring in some temporarily relieve, but you are actually setting a platform to get trapped in serious debt problems. Lots of debt is an easy way to get yourself living on the financial edge. If half of your income is going towards interest, then you might need to think about ways to reduce your debt or increase your income to pay it off.

Forget To Save Money

Are You Living On The Financial Edge
Undoubtedly there has been a sudden rise in the cost of living. Right from fuel to food the prices of all commodities are sky rocketing. Even if you try live on a strict budget, you still need to need to deal with unexpected expenses apart from your ongoing expenses. You have ignored the importance of saving money and having some emergency funds for any uninvited trouble. Lack of sufficient funds leaves you exposed and vulnerable, completely unprepared for the negative effects of financial crises.

Lack of Adequate Insurance

Are You Living On The Financial Edge
Having your own house, car is what is on the top on the list for many people. Once you have this in your assets they are content and ignore the importance of preserving it. You could be a victim of an accident, or your house could be damaged in a natural calamity. And these events can storm your financial life. You may think that you are wasting money by buying insurance for your life or property, instead of realizing that you are investing in security for you and your family.

Invest Without Sufficient Knowledge

Are You Living On The Financial Edge
Risk taking is necessary for getting ahead in life. You invest in stocks and other funds without having a complete knowledge about stock or fund you investing your money in. You either go by market trend or the advice of your family and friends. But you don't know whether your investment will help you achieve your long term goals. You pay no attention to the likelihood of your plans going wrong and the possible financial consequences of failure.

Don?t Grab Opportunities To Earn More:

Despite knowing the fact that you running out of funds, because your income goes in paying all necessary bills, and keep out of unnecessary debt. You still on the hope that you might get a huge fortune over night or win a lottery that will save you from financial problems. You might be pulling yourself over the financial edge by missing deadlines. If you are not making enough money, then look for different ways to increase your income. Use your talents and creativity to bring in that extra income home.