Easy Finance

Good health, most of us would agree, is the most important gift we can enjoy throughout our lives. Good health allows us the ability to live life to the fullest, to pursue our goals and dreams for success and accomplishment, to nuture our relationships with our family and loved ones. When we become aware of symptoms affecting our health, most of us will immediately enlist a doctor’s aid and go through a course of treatment or modify our lifestyle in order to correct the health issue before it progresses further.

Just like a chronic disease, financial distress comes on in stages, and if caught and controlled in the earliest stage is much more likely to not metastasize like a cancer to all other areas of your life. We all probably have a sad story about a friend or neighbor who was having health symptoms but delayed going to the Doctor because they were “too busy” or “scared to know” and ignored the signs, and by the time they were diagnosed it was too late.

The early warning symptoms of financial stress and excess debt are similar in that both should be identified and treated as early as possible to achieve the best success rate. Here are some of the early signs that may indicate that your financial situation is destined for trouble:

• Your total monthly debt payments exceed about 40 percent of your gross monthly income.
• You need to consider taking a second job to pay your bills.
• You are seeking to borrow money from family and friends.
• You are regularly late paying credit card bills, are only paying the minimum payment, are maxed out on them or are shuffling balances from card to card using cash advances or balance transfers.
• You do not have health insurance. Unexpected medical bills are one of the top causes for bankruptcy filings, thus the extra monthly expense may save your financial future (not to mention your life).
• You no longer have savings available to cover your living expenses for about 6 months, your “emergency” fund.
• You are considering taking out a home equity loan to cover your excessive bills or other debt, as opposed to the intent of this type of loan, which is to build more equity in your home through an improvement to it.

I learned this morning that some acquaintances that I know from my son’s school that had been struggling as a one-income family for some time now lost their van to repossession over the weekend. I thought to myself that they’ve had warning signs for over a year now, and there was a number of things that I felt they could have done to prevent this. Repossession of assets, along with foreclosure notifications, those are the latter symptoms of financial trouble, and it is tough to dig out of that hole once you’ve reached it. But people need to decide this for themselves, take the early signs more seriously, not push the issues under the rug and expect them to take care of themselves.

With so many people being affected by financial stress in this economy this information must come as no surprise to most of us. Readers, do you have any other early symptoms of financial distress you can suggest for addition to this list? Or a sad (or happy) story of enlightenment to share? Leave a comment if so!

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