Money Matters:: The Red Flags that Show You're in Financial Trouble

Personal Financial Troubles don't happen overnight. Most of the time, we are in denial and want to forget that we are heading towards the loss of our home or bankruptcy. The denial? If the credit card still works that means I still have credit and the ability to buy.

Who are we fooling?

We need to get a back bone and recognize that there is a problem. Once we do, the ship will turn around for us but it takes dedication and commitment to make it happen.

Heres the Red Flags:

Credit Card Payments: If you are making minimal payments on your credit cards or returning items to keep the credit card balance higher, you've got a borrowing problem. If you can't pay your credit card balance in full at the end of the month, then pay at least two minimum payments to keep yourself from spiraling down into financial trouble.

Emergency Money: This is not a savings account but a bone fide Emergency Money Account that should be equal to six months of your monthly income. This is a bottom basis for Emergency Money and it would be ideal if you had more in this Emergency Fund but we have to start some place if our Emergency Money fund is ZERO!

Bills: Are you throwing the bills into a box and picking out which ones you want to pay for the month? Or, are you just overstretched for the month only. There is a difference and one says you are heading into finaical trouble and the other says, you are okay but be careful.

Credit Scores: If your credit score is below 620, that is another red flag that says you are in financial trouble or heading that way.

Bouncing: I have a friend who was paying over $350 a month in bounced check or late payment fees to her bank or credit cards. If this is happening every month you are in financial trouble.

Words of Encouragement:

We were not born to understand our finances. It is something that is learned. Do not beat yourself up because you have two or more of the red flags. What you need to do, is to read and learn from your mistakes and take baby steps. I am a believer in baby steps. The sad fact is few people take the courage to reach out for change. I hope you reach out and take that first baby step.