Happy Halloween! It’s been reported that the most Americans are celebrating this year than any other year in history. While some people had multiple costumes for parties over the weekend and another one for tonight, others, like myself, are more concerned with scary situations. This of course has to do with money and personal finances. There are a lot of bad things that can happen with poor financial management, but here are just 6 situations you don’t want to find yourself in:
- Living above your means: When you live above your means, you’ll find that your expenses are more than your income and cash flow. It’s easy to fall into living above your means by trying to keep up with the Joneses, allowing lifestyle inflation to take over, or by simply not budgeting your money. Once your money is in the negative, you will find yourself in big money troubles.
- Missing payments: Missing payments on your bills will make your credit score really scary. When you become delinquent on accounts, and it’s reported to the credit bureaus, you’ll get a nasty mark on your credit report, and your score will drop tremendously. If you try to apply for more credit, creditors will turn you down, as they’ll be afraid you won’t pay them on time. In order to keep up with your payments, put your due dates on your calendar.
- Buying more house than you can afford: This is a hard lesson that millions of Americans found themselves learning the past couple of years. When you buy more house than you can afford, you run the risk of missing payments, and your house can be put in foreclosure. Instead, save up enough for your down payment and closing costs, and get a home that you can afford to make the monthly payments. When you do, you can be like Crystal and pay off your house in 6 years or less!
- Having your identity stolen: Identity theft is a real and serious issue, especially around this time of year when people are preparing for the holidays. If you’re going out shopping, be sure to guard your purse or wallet with your life. Be cautious of the people around you as the seemingly shiesty people could be scanning your credit card information. Use cash to be safer. Be even more cautious when shopping online. Purchase from trusted retailers, use Paypal, and look for the “https” and lock sign in your address bar.
- Losing your job: What’s scarier than losing your job? Not much. Being laid off or dismissed from your job is also a reality for many people. To check on your job security, talk with your supervisor and see how you’re doing performance wise, and ask how your department is doing as well. Prepare for the worst by having an emergency fund ready.
- Health emergency, no health insurance: Health emergencies can happen at any moment. From an accident, to an emergency surgery, you may need to be rushed to the hospital. Without health insurance, you’ll find yourself footing a pretty large bill. Prevention will only go so far. If you don’t have health insurance, you can search for some affordable options online.
Again, these are just a few of the scores of money situations that can put you in a scary place financially. What are some other scary money situations?