Signs that you are living on the edge

If debt is overwhelming you, act before you drown

newvision

By Sylvia Juuko
Everyone gets into a tight financial bind once in a while but eventually get back onto a firm footing. For example, you can be late on rent or mortgage payments or delay to pay your school fees. These are eventually paid off and you can still meet other necessities.


 

However, what should get you concerned is if you are perpetually in financial distress and unable to cover your expenses.

 

To stay ahead of the curve as far as managing your finances is concerned, there are telltale signs that you need to look out for. These include but are not limited to the following:

 

Too much ‘month’ at the end of the money

A good number of employees can relate to this situation. The excitement that comes with end of month pay-day elicits some interesting behaviour.

 

It’s easy to spot the restless types who have to ‘dash’ somewhere around this time of the month.

 

Once they receive information from the payroll administrator that the money has been credited to their accounts, they make one trip to their bank and carry one transaction-withdraw most of their money from the account. 

 

By the second week of the new month, post paycheque blues have set in as they try and figure out how they will go through the rest of the month with their salary account in the red.

 

Multiple borrowing

You have overleveraged your income to the extent that almost nothing is left to take home. With this kind of financial situation, you have to borrow from Sarah to pay Thomas.

 

You have spun so many tales regarding when you will repay your debts that you actually believe the lies.

 

Dodging loan sharks has become a way of life. Once you exhaust your circles, you ‘branch out’ and borrow from other people and within no time you are living in a cycle of high debt.

 

Banking on a deal to set you off for life

Your financial plan is pegged to winning the lottery. You convince yourself that you are just minutes away from that one deal that will transform your finances overnight.

 

Your ‘investment plan’ is putting resources, including borrowing in all the betting activities, as well as participating in the numerous ‘participate and win’ promotions.

 

The reality is you never win big but always hope that the next deal is ‘it’. The debts are piling up but you keep hoping that the next lot is your wining number.

 

Zero savings

If you have no savings to talk about, you are taking a huge risk. You keep promising yourself that you will save when you get that windfall or in the coming month but you never get round to doing so.

 

This puts you in a situation of having to resort to handouts from friends and family to survive, in case your current income is cut off.

 

Attitude

You think that getting knowledge related to managing your money is for those folks living on the breadline and not the sophisticated ones like you.

 

You have not learnt any new skill related to utilising what you earn and how to multiply it to sustain your future.

 

No retirement plan

Any talk related to retirement planning puts you off because you are convinced that it should be directed to the elderly. You believe you still have a lot of years ahead of you before you can worry about retirement. 

 

Given that life is short, you need to live a full life of spending without abandon so that by the time you age, you have a story to tell your grandchildren.

 

Living like this is financially risky because it leaves no room to absorb a financial shock like loss of income. Planning for your net income is critical and must be undertaken consistently despite your income.

 

The writer works with Bank of Uganda