Financial trouble comes in all sizes. One would ask if there weren’t any signs of all the pending trouble in the first place. The answer: Yes, there are usually signs but if they go unattended for too long then there will be trouble. It is the same way with our personal finances. If we ignore the warning signs we will have to deal with the results of our actions, or rather inactions. But before we can avert financial trouble, we need to know the warning signs.
You use loans to cover your daily and monthly expenses
There are times when we have emergencies and need to get a small loan to pay utilities, or pay for transportation for the month, or maybe even buy groceries. But if this is something that has become the norm, you may want to assess the situation.
Create a list of all your expenses and see which ones you can do without or reduce for each month. For example, if you spend $5000 on electricity bills for the month, look at ways in which you can reduce your electricity usage. Plan your meals and prepare them at home, it is far cheaper than winging it everyday you are at work and buying whatever fast food is on hand.
You don’t have enough money remaining to buy food
Not having enough money for food means depending on a neighbour or, if you live in a farming community, the pieces of ground provisions the farmers leave in a pile on their farm for passers-by (yes that still happens). It means scouting fruit trees and begging for food because all your money has gone into paying debts.
After making a meal plan for the month, visit the market at the cheapest time, usually the day before new foodstuff and produce are scheduled to be delivered. Do not put food purchases as the last thing on your budget. set aside a specific amount for food and stick to it.
You don’t know how much debt you have
If you do not know how much money you owe each of your creditors or how much you owe to them all overall, you may be nearing a crisis. There is no way you can feel assured that you are clearing your debts if you are simply handing over your paycheck without finding out how much your of debt it is settling.
Muster up some courage and contact all your creditors. Ask them for a printout of your debt and the interest. If it is an informal loan such as one from a friend, it is best to get that in writing as well. This will show your creditors that you are serious about repaying them and are making some plan to do so and to repay it all. Having a list of all your debt now allows you to find out exactly how much you owe overall. George Clason, author of the book Richest Man in Babylon, said it best when he advised that 20% of your income go to repaying debt, explaining to his creditors that instead of running from them he would pay a small but consistent amount each month. Talk to them, ask them to lower the interest rate or refrain from increasing it. Just be sure that you keep your word.
You have no savings
You’ve opened about four different bank accounts for your present and past jobs, there is that one account your parents opened for you when you were younger and the one that you opened when you started your journey to financial freedom when you graduated high school. Problem is, they are all pretty much empty and some of them have negative balances because of bank fees.
Put aside ten percent of your income for savings. We know you want to save, usually the problem is that the money is quickly used up elsewhere and when you do get to save, it is quickly used on “emergencies”. The solution is to open a saving account such as a Victoria Mutual iSave account, where you deposit a specific amount each month and that you have limited access to for a certain period of time. This will help you to meet short-term goals and at the end of the period you can place this money into a long term investment.
You can no longer borrow money from family or friends
Its an embarrassing situation to be in. We all dislike feeling as if we have to avoid the people we love because we have an outstanding debt with them.
Don’t skip the family reunion out of fear of running into those aunts and uncles who loaned you money. Instead talk to them. Some may be willing to cancel your debt all together
You cannot afford to visit a doctor so you self medicate
Self medicating is serious and can be a dangerous thing to do. It is so easy to do nowadays with the many different resources and information available online. But that is what also makes it dangerous.
Instead of hitting up doctor dot com to find out if your pains are from sleeping badly or a supposed terminal illness, visit a doctor. We know, you can’t afford one, but there are public clinics that you can visit and get a check up from a doctor for free. The doctors are not always there so find out when one will be in and get there early enough to beat the crowd.
You are on the verge of losing utilities or you already have
You may be heading into financial trouble if
- you fear the sound of your gate opening or prepare to beg the Meter Man to wait one more week before he can disconnect your light or water. OR
- you’ve already been disconnected but somehow still have access to light and/or water.
Speak to an agent at your utility company. Ask about waivers and discounts you may qualify for or if your account can be reviewed. If your electricity has been disconnected, the Jamaica Public Service company are willing to charge the reconnection fee on a later bill if you ask.
You are currently searching for a second or third, or fourth job
Jamaicans are notorious for their hard working nature at home and overseas. Being able to balance multiple jobs is commendable but if you find yourself searching for a second, third or maybe even fourth job just so you can cover your bills and pay your debt, you may be heading towards a financial landslide.
It is no fun working all day and night with no downtime for family or friends. Instead of accepting many low-paying jobs try applying for a job that really pays. If you can replace two jobs with one and still have time to spend with your kids then why not right? Many people overlook jobs that they think are too good for them not noticing what might happen if they just try. We’re not saying to apply for a CEO position with only an Undergraduate degree when they are asking for a masters degree, but if you meet the qualifications, don’t let the job title scare you.