Many of us who adopt their way of life “of the pegs than the pole”, or more expenses than income. Even then able to save, it is still not stable in the next month. What about you? Are you the type of people who manage their money “large pegs than the pole”?
To find out, there are a number of signs that can be used as a reference:
1. Your finances can not make you survive till the next six months
It is interesting to know at what savings we get arguably financially unstable. A number of financial experts, including Sheryl Garrett, said it’s worth saving the old days, emergency money, or whatever it’s called, can make you survive until at least six months. It was a matter of cost meals, transportation, mortgage, and so on. Why is that?
Imagine if only you are laid off or quit the job now, at least you still have a stash until you get a new job with the same salary standard.
2. Only 10 percent of salary set aside each month
Ideally someone recommended to set aside a monthly salary earned by 10 percent for retirement starting at age 25. Moving on from a report in 2011, the Center for Retirement Research at Boston College calculated that if someone saving at age 25 and retire at age 70, he needs at least 7 percent of their earnings in order to achieve financial stability. If you want to retire early at age 65, then set aside 15 percent of your salary every month.
3. Your mortgage is more than a matter of weeks salary
This relates to your ability to buy a house at a price according to your income. A few weeks salary is just a rough idea. “It means that your mortgage payment should be no more than a quarter of your income,” said Harold Evensky, certified financial planner and president Evensky & Katz Wealth Management in Coral Gables, Fla.. In other words, keep your mortgage only approximately one-quarter of your salary.
4. The same as the credit card bills years ago
Just knowing that the credit card bill is always the same, it is a sign that you spend more than put money. Especially if you use a credit card even bigger every year or every month. Because credit card debt is usually not finance assets grow, but only fund the lifestyle. If you can control yourself and every time to reduce the amount of the bill, would be good for your financial situation.
5. Easily persuaded by the goods or installments without interest
Often there are interesting offers that come over, where you can buy your dream goods in installments but you can pay the installments without interest, and so on. There is also the offer of payment without interest within a certain period, eg up to a year to come. Better not take the risk, just to imagine if you can afford it later. Because if you can not afford it now, what next?
6. Paying credit card bills with other credit cards
This is typical of other great people pegs than the pole. You are always looking for a new credit card to transfer the credit card bills from the old one. By Erin Baehr, a financial planner in Stroudsburg, Pa., if you accumulate credit card debt in applying high interest, move one card bills to another card that lower interest rates would indeed be beneficial. But if you transfer to another card that charges high interest credit cards to increase the limit, it is not a wise decision.
7. Before buying something you often think, “I know, I should not buy it, but ….”
“I’ve worked hard, so I am entitled to a flat-screen TV’s,” or, “I work hard, so I need a vacation for my mental health,” says you. Sounds familiar, does not it? Often we are looking for an excuse or justification for getting something whose value is far above our ability to buy it. Believe it should not, according to Baehr, words like these often come from the fact that financial difficulties. If you are financially stable, you usually will not reveal that.