The early signs of a disturbed fiscal life will not take long to appear into a bigger crisis which can be very hard to manage.
The state of an individual’s monetary life is not clear only on the basis of the income he earns. At times, even after earning well, your monetary life might not be in the best of shape. Many people are also comfy living in the supposition that all is well.
Though, there are some broad signals or pointers which will inform you that your monetary life is in problem. Keep in mind that the more convincing these signals are, the more are the possibilities that you are moving towards monetary disaster, and the more significant it is for you to take practical steps to correct the problem.
Here are some signs which tell you that your monetary life is in difficulty:
1) You cannot carry on without earnings for three months
Income is different from wealth. It is seen at times that people earn good salary, but if they lose their job unexpectedly, they are struggling for even the essential expenditures. This is because they have not saved up sufficient to meet emergencies. If you have been working or in a business for some years, then you should have a good support in place which will assist you in surviving for at least 3 months. When your expenditures are very high and you do not have much left even when you are earning, you are heading towards economic disaster. This is the first sign to explain that your monetary status is unstable.
2) You shell out high EMIs on devaluing assets
Having too many liabilities on your books is not good. It is shoddier if you have debt which does not end in an appreciation of your assets. For example, having hefty amount of personal loans, credit card debt or even car loans which leads to high EMI outflow from your monthly income is a very harmful exercise. Your total EMI outflow should not go beyond 40 percent of your monthly take home pay. If you have a home loan, the EMI towards this will comprise a large part. It is thus better to keep away from other kind of debt which does not increase your asset value. When you understand you are paying high EMIs on depreciating assets, this is another sign of monetary problem.
3) It is not painless to find a better paying job with the abilities you have
Professionally, you must grow and progress in your career, such that it converts to higher income and higher savings. But, if you realise that you are not able to grow in your career regardless of constant efforts, it means that you are going to be fixed with the same salary every year, or be contented with a small hike. This in turn implies that your investments will be limited, leading to limited wealth building prospects. Take a practical step in polishing your abilities and building your career for an improved monetary life also.
4) Expenses on social functions
Majority of people in India consider in spending needlessly on social functions, moreover as a status symbol or following the traditions. Even though this may be a significant part of your life, spending lavishly on social functions is a sheer waste of money and does not give up anything. If you comprehend that you have been spending excessively on such functions, you can be certain that you are moving for economic mess. A good way of finding this out is to pen down all the expenditures you incurred in the past 3-5 years on different social functions and make out how much of your earnings have not been put to good use.
5) Working for long, but no benefit
If you have been working for at least 3 to 5 years, but still have no advantage, then it indicates your monetary life is in problem. You ought to have some investment in fixed deposits or gold or mutual funds or have a little part of down payment saved for your future. If you do not have any of this, it means you have been very lackadaisical in your economic life and must instantly put your funds in order.
The early signs of a disturbed fiscal life will not take long to appear into a bigger crisis which can be very hard to manage. It is vital to start at the earliest and correct your past faults.