Are you good with money - or do you spend every month wondering how you're going to meet your bills? Financial problems can be caused by outside factors, but are often down to poor money management. It's smart to do your best to avoid getting into financial difficulties. Here are some tips to help you avoid getting into a financial mess and having to deal with disaster …
One of the most important ways to help you avoid financial problems is to always live within your means. However much you may want a certain lifestyle, if you don't have the money to maintain it then it's out of reach. Live according to your income, not your aspirations.
Financial problems often arise through a lack of planning. Sorting out your finances may seem boring, but spending some time on organising your finances could save you a lot of time in the future. It could also save you money. Plan for potential issues like unemployment, ill health, house repairs and pregnancy.
Always have a financial safety net in case of emergencies. At some point you might be unable to work, or your car could need replacing. Even if an emergency never arises, you'll be reassured that you've got that safety net if you need it. And if something does go wrong, you'll have the money to deal with it rather than getting into debt.
You should also make sure you are fully informed about everything concerning your finances. Don't leave it to your partner, or assume that things will sort themselves out. If you know when your house insurance is due, you'll be able to pay it in time - and won't discover when your house is hit by lightning that your insurance has lapsed, leaving you without coverage!
As boring as it is paying bills, always prioritise essential spending over fun purchases. And don't spend everything left over once you've paid your bills. Spending everything you've got means that you'll be in trouble if an unexpected expense comes in, or you lose your job.
Always be level headed when it comes to money. Don't expect a miracle to come along and pull you out of a financial hole - it won't happen. Nor should you rely on family to rescue you. The best way is to avoid getting in a hole in the first place. Also be wary of get rich quick schemes and scams.
Sensible people avoid getting into debt. There are only a few situations that are worth taking on a debt. Buying a home (that you can comfortably afford) is one, and training for a career can be. But on the whole you should be debt averse, so that you don't have to pay interest or face payments that you can't meet.
Financial messes often come about because of lack of planning. Anyone can suffer health problems or other misfortunes, so never assume that it won't happen to you. Plan for as many situations as you can, and you'll be better off if something unfortunate does happen to you. Take responsibility for your own finances. How much money do you think you'd need to be financially set up for life?