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Are you overwhelmed by how difficult it seems to plan for your future? Do you find yourself wishing it were easier to get ahead? For those of us who don’t make a lot of money, it may be hard to save up an emergency fund or a cushion for the expenses in life that sneak up on us. People preach about having money in reserve for these unexpected expenses, but in reality, it’s much harder to do.

Yet, that doesn’t mean it is impossible nor important. Putting money aside for these type of expenses is very important because it keeps you from digging a whole. While not all debt is evil, it is important to avoid the cyclical nature of it.

Limited Options Without an Emergency Fund

People without an emergency fund saved up are left with fewer options. For those who don’t already know this, fewer options is usually a bad thing. It forces you to make decisions that you may regret later. The more options you have, the more possibilities of selecting a “good” option and not just one that is the best of bad decisions.

Borrowing Money: If we are honest, most people, when faced with an unexpected expenses, are forced to borrow money. The people who are smart enough to limit their negative impact will often reach out to friends and family first. Friends and family are there for these type of emergencies and should be considered before things like payday loans online, but they won’t solve all of your problems. In fact, asking family members for money too often will often ruin the relationship. There are many reputable companies that offer bad credit loans so if you need to, do some research online and try to find a good local company that has a good reputation.

Bad Credit / Collections: The only other option available is to let the expense go unpaid. This will often result in it going to collections and this can ruin your credit for a long time. While you may be left with little or no options, you want to do everything you can to avoid this option.

Be Pro-active!

The best thing you can do is to be pro-active. It sounds like every other advice out there, but it so true. Don’t wait for an emergency to pop up. This means starting with spending less than you make. If you spend every dollar of your paycheck, how are you going to afford the future expenses that are bigger than the paychecks? Not to mention, continuing to pay for the ongoing expenses like rent or insurance.

Start by saving just a little bit at a time. I think if you can see yourself saving a little, you will not only feel more comfortable in yourself, but you will realize how much MORE you need to save.

Stop giving yourself limited options in life. Take control of your finances and act today.

If you are trying to get your finances in order, you may be reading a lot of advice on what you should do. Everyone is quick to say that you should do this or that, or offering advice to you (even though they don’t know you) on how you should invest. The list goes on and on, but perhaps the first step is to identify what you should NOT do.

Often times the things that keep us from financial security are not the tasks that we forget to do (or didn’t know about), but the unhealthy things that we failed to recognize. Here are several indications that your finances are not in order, despite what you may or may not think.

Carrying a Credit Card Balance – Even if you are doing all other things right, carrying a credit balance is an easy sign that you are throwing money out the window. Most credit cards have high interest rates and it will cost you big time to carry a balance. But that’s not the worst of it – carrying a credit balance is often a sign of consumer debt. If you carry a balance on these pieces of plastic, it may be time to honestly ask yourself if you are buying stuff that you don’t need and can’t afford.

Living Paycheck to Paycheck – I have trouble understanding why people would want to live this way. I imagine that they don’t want to do it, but see no way out. I understand that if you are in a tight situation, you would consider all sorts of loans to provide temporary relief (including parrot loans), but at some point you have to get back on track. If you are waiting for your next paycheck in order to pay off some of your bills, it might be time to consider saving up money over the next few months to get yourself out of this horrible financial place. It is possible, regardless of how much money you are making, to live with some cushion and (even more importantly) peace of mind.

“Can’t Afford” to Save for Retirement – If you find your saying that you “can’t afford to save for retirement,” it might be time to re-prioritize your finances. Almost everyone can afford to save for retirement. It’s just a matter making it important to you. To find out if you can really afford it, ask yourself these questions:

  • Am I eating out more than once a month?
  • Do I go out to the movies frequently?
  • Do I buy my lunch?
  • Do I own clothes that I don’t wear?

While this is just a few of the many questions that you could ask, if you answered “yes” to any of them, then you have money to save for retirement. Retirement planning is all about prioritizing the long-term goal of financial security when you are old over things that you want now. It’s that simple.

If you can identify with any one of these 3 signs of dysfunction, it might be time to re-evaluate your approach to your finances. Maybe it’s time to set things straight and live a better life. You have the power to take charge of your finances. What are you waiting for!

What are other signs of dysfunctional finances?