4 Pillars in Victoria Shares Warning Signs of Financial Trouble
In a perfect world, nobody would have to stress about getting bills paid on time and loans wouldn’t be needed since you have plenty of money in your bank account. For some people, that’s reality, but it’s not common. Most people have various financial needs from loans to bills and retirement while also trying to have enough money for entertainment. It’s not uncommon to miss a bill payment on occasion, but at a certain point, it may mean you are in hot water. We’ll share some examples of situations where you might be in trouble.
Lack of an Emergency Savings
Whether you have no savings or simply have too little of it, you aren’t alone. 4 Pillars in Victoria works with people in your situation every day. Having no savings does mean you need to make some changes. If you were to have an emergency come up, you might have to take out a loan to pay for it. Then you have tacked on fees and interest to deal with. It can all add up and turn into a much larger problem very quickly.
Paying the Minimum Payments
The reality is that the minimum payments you pay on credit cards and loans aren’t designed to make it easy to pay off all of your debts. Keeping them low helps lenders ensure that your balance stays active longer and they can enjoy the interest that you send in. If you have a credit card with $1,000 on it with an interest rate of 20%, your payment might be the interest and a small amount of the balance. Making minimum payments, this could take a decade to pay off and nearly half of the amount paid would go to interest.
Using Credit to Pay Other Loans
One of the biggest warning signs that your finances might be in trouble is having to pay off credit debt with other debt. While you may be meeting your obligations, you’re also racking up more debt. Some people will do this for months or even years until the credit all runs out. At that point, you can be in some serious trouble. Finding a way to handle your debt now is the better option.
If you’re concerned about your finances, 4 Pillars in Victoria is here to help. You can learn more about our services by visiting us at www.4PillarsDebtConsultants.ca.