How To Know If The Financial Plan You Have Is Not Working
When you have a really solid financial plan set up, you will have less stress to deal with. The problem is that it is difficult to set up a truly effective financial plan. That is why we should know when there are some signs that something is not working really well. Consider this and make all necessary changes to your financial plan when you identify the problems.
Are You Comfortable With Your Budget?
As a basic rule of thumb, in the event that there is something that keeps you up at night and it is related to finances, something is wrong and needs to be changed. The solid financial plan is based on a solid budget. That is used as a guide to keep spending under control at all times.
We see many that do not want to talk about their finances, usually because of feeling embarrassed by low savings or a lot of debt. Such facts will make you postpone meetings with those professionals that can help. Do not make this mistake. If you notice that there are problems with the budget, do talk to a professional whenever you cannot handle everything alone.
Can You Spend Money On Special Occasions Without Feeling Guilty?
There are moments in life when we do want to spend a larger amount on something. If you feel guilty about that, it means that your financial plan is not prepared to handle the unexpected. This is one of the clear signs that you should revise something.
As an example, there are various events that would require you to save more like an anniversary or a birthday. Maybe you just want to go on an unplanned vacation. In an ideal situation, you should have the money for that. If you do and you feel guilty about spending money, it actually means that you did not have enough.
Balance Does Not Grow
When you consistently spend less money than you earn, you are financially snowballing every single year. That means that you keep saving and you do keep investing so that your future is secured. Whenever you notice that the balance remains the same or even goes down a little, it means that something has to be changed in your financial plan. Your available funds need to keep growing, not remain the same!
You Do Not Have Money To Cover Expenses If You Lose Your Job
The first step towards achieving financial independence is having an emergency fund that can cover 3 to 6 months of expenses. When you do not have that, losing a job can hurt you really bad. Losing the paycheck and having to look for a job while under stress because you do not have money will make the entire situation a lot worse. On the other hand, if you do have money to pay bills, you will be able to find a good job faster as stress does not really exist.
Credit Cards Are Always Maxed Out
This is a drastic situation but the rule here is: if you constantly find yourself taking money out of the credit cards, you need to make changes as the financial plan is not great. Paying off the cards every single month is a necessity if you want to take advantage of the reward points but this is only possible if you maintain a proper balance.