While no one can look into a crystal ball and determine where they will be financially in twenty, thirty or forty years, there are some early warning signs that may indicate that the future might be a bit gloomy. The key to successfully preparing for your future is to avoid known behaviors that can be disastrous to your finances. Here are some of the warning signs that you need to look out for if you want to make sure that your financial future is safe, secure and happy.
1. How willing to go into debt are you?
There are two answers to this question, and only one of them is correct. If you are willing to use your credit card for any old thing, or you have a problem keeping your balances down, this is a sign that you may be overly willing to go into bad debt. Bad debt can take many forms, from getting a house that is too expensive to maintain, to buying a car that is over priced. Anytime you are willing to go into debt for something that will never end up paying you back, you are running a financial risk.
On the flip side of this equation, if you are willing to go into good debt, then your financial future may look quite different. Put simply, good debt is the kind of investment that will produce a return for you, whether it is in monthly payments, such as with a rental property, or long term benefits such as a regular investment. Being willing to go into good debt, and taking the time to make sure you are making a solid investment with that debt can have a very big impact on your financial future.
2. You consistently overspend.
This is a major warning sign that may indicate severe trouble in the future. If you simply cannot hold back and find yourself spending more than you earn month after month, it will add up. Whether it’s overspending on credit cards, or simply failing to notice your cash flow problem, this is a problem that has lasting consequences.
3. You have no financial goals.
This is a sign that you may not be taking your financial future as serious as you could be. Having short term and long term financial goals can help you create a better mindset about your finances. When you are working towards that goal, it’s a lot more edifying to reach it. People that take the time to actively set financial goals and actively work towards achieving them will usually have a much brighter financial future than those that do not.
Your financial future doesn’t have to be gloomy, and it doesn’t have to be set in stone. By taking the time to review your spending habits, and how you view money, you can put into action the events that will change the course of your financial future and may even fix what went wrong in your financial past.
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Originally posted 2008-10-20 05:43:39. Republished by Blog Post Promoter
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