Desperate woman crying with bills, capturing the effect and signs you're bad with money

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.

Ayn Rand

Have you ever been called out for making dumb choices?

We all have our moments, but it’s tough to admit when we mess up. It takes guts to face the truth and step out of our comfort zones to fix our mistakes.

I remember when I was drowning in debt, I realised I had made some pretty bad decisions and needed to turn things around. But it took way too long to finally admit it and do something about it.

Don’t make the same mistake as I did and wait till your money problems snowball into something bigger.

If any of the signs below hit close to home, it’s time to get moving.

The sooner you act, the quicker you can escape debt and regain control over your finances.

Man smelling money from piggybank, capturing signs you're bad with money

12 Signs You’re Bad with Money

Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.

Will Rogers

1. You’re Making Impulsive Purchases

Impulse purchases can wreck your budget and lead to financial trouble.

In a recent survey by Slickdeals and OnePoll, they found out that 73% of respondents said most of their purchases tend to be spontaneous, a significant jump from 59% in the previous year’s study.

Louie Patterson, Personal Finance Content Manager for Slickdeals, notes that Americans are spending more on impulse purchases than in the past two years, with the average person now spending $314 per month on impulse purchases, up from $276 in 2021 and $183 in 2020.

Are you one of those who find themselves caught up in this trend?

Before buying something, take a step back and ask yourself if you truly need it. If not, resist the temptation and save your money for more important expenses. It’s crucial to be mindful of your spending habits to maintain a healthy financial situation.

2. You’re Maxing Out Your Credit Cards

Maxing out your credit cards is a sign that you’re living beyond your means. It can lead to high interest charges and damage your credit score.

Aim to pay off your credit card balances in full each month and avoid spending more than you can afford. I learned this lesson the hard way.

When I first started managing my own finances, I maxed out my credit cards due to impulsive shopping sprees and luxurious holidays.

It felt exhilarating at the time, but the consequences soon caught up with me.

As the high interest charges piled up, I struggled to pay off my balances each month, and my credit score took a nosedive. That’s when I decided to change my spending habits and started focusing on living within my means.

Maintaining a healthy relationship with credit is essential to avoid financial stress and keep your credit score in good shape.

3. Struggling to Pay Your Bills in Full

Woman with too many bills, demonstrating signs you're bad with money

If you’re struggling to pay your bills in full, it’s time to take a look at your expenses and cut back on non-essential spending.

Personal finance expert Dave Ramsey suggests in his book “The Total Money Makeover” that creating a zero-based budget can help you prioritise your financial obligations and avoid falling further into debt.

So, make a budget to keep your finances in check.

4. Your Credit Score Has Taken a Hit

I remember a time when I didn’t pay much attention to my credit score. But, as I started to take my finances more seriously, I realised that a dropping credit score can be a sign of poor money management.

I started monitoring my credit regularly and discovered that late payments and high credit card balances were lowering my score.

It’s important to keep an eye on your credit and tackle any issues like late payments or high balances, that could be negatively affecting your score.

5. You’re Not Saving Money for the Future

Not saving money leaves you vulnerable to financial emergencies and limits your ability to achieve long-term goals.

In his book “The Richest Man in Babylon,” George S. Clason emphasises the importance of paying yourself first by saving at least 10% of your income.

Start by setting aside a small amount each month and gradually increase your savings as you become more comfortable with your budget.

You can read my book review about The Richest Man In Babylon here.

Wealth consists not in having great possessions, but in having few wants.


6. Living Paycheck to Paycheck

I used to think that living paycheck to paycheck was just a part of life, especially since I was able to cover my expenses and had some fun along the way.

I didn’t realise the risks that came with this lifestyle until a few years down the road, when an unexpected expense caught me off-guard.

It was then that I understood the importance of managing my money more effectively.

Living paycheck to paycheck isn’t the same as struggling financially, but it’s not a good sign either because it may imply that there is little to no financial cushion for unexpected expenses or emergencies.

Focusing on reducing expenses, increasing your income, and building an emergency fund can help break the cycle and gain financial stability, giving you peace of mind and a more secure future.

7. Avoiding Money Conversations with Friends, Family, or Loved Ones

Woman with messy hair covering her face with her hands, depicting signs you're bad with money

Growing up, I only knew we were poor, and I had no financial literacy.

Open communication about money is essential for maintaining healthy relationships and teaching good financial habits. Talk about finances regularly and involve friends, family, or loved ones in financial decision-making.

Of course, if you are not comfortable discussing certain aspects of your finances, it’s important to find a balance and only share what you feel is appropriate.

But, being more open can lead to better financial understanding and support from those around you, as well as helping you develop better financial habits for the future.

8. Feeling Stressed About Money Matters

I remember there was a time when financial stress seemed to consume my every thought. It affected my well-being and made it hard to focus on anything else.

But I knew I had to recognise the signs of stress and take action to address my financial troubles. So, I started by creating a budget, cutting expenses, and even looking for additional income sources.

Gradually, I felt more in control of my finances, and the stress began to subside.

If you’re in a similar situation, don’t let financial stress take over your life. Identify the issues causing it and take proactive steps to resolve them.

9. Budgeting: A Missing Piece in Your Financial Puzzle

I used to wonder why I couldn’t make progress with my financial goals, even though I was earning a decent income. It wasn’t until I created a realistic budget that I realised I had been missing a crucial piece of the financial puzzle.

By accounting for all my income and expenses and adjusting my spending habits, I was finally able to stay on track towards my financial goals.

A budget is a crucial tool for managing your finances. Create a realistic budget that accounts for all your income and expenses, and make adjustments as needed to stay on track towards your financial goals.

10. You Don’t Keep Track of Your Spending Habits

Tracking your spending helps you understand where your money is going and identify areas for improvement. Use a spending diary or a budgeting app to monitor your expenses and make better financial decisions.

I used to spend money without giving it much thought, and I had no idea where it all went. Once I started tracking my spending, I discovered areas where I could cut back and make better financial decisions.

Monitoring my expenses helped me understand my spending habits and make necessary adjustments to improve my financial situation.

11. Taking Shortcuts with Your Money Management

Miniature of home, coins, clock and calculator, representing the concept of signs you're bad with money

Taking shortcuts like skipping insurance or ignoring financial planning, can lead to long-term financial problems. Invest time in understanding your finances and making informed decisions to secure your financial future.

In the past, I tried to take shortcuts with my money management, like skipping insurance or ignoring financial planning.

Eventually, I realised that these shortcuts were causing long-term financial problems. I decided to invest time in understanding my finances and making informed decisions.

12. Fearful of Investing and Growing Your Wealth

Investing can be a powerful way to grow your wealth over time.

Educate yourself about different investment options and seek professional advice if needed. Start small and gradually build your confidence in investing.

Time to Turn Things Around

How many bad money habits did you identify?

If you’re experiencing any of these signs, now is the time to examine your finances. Don’t make my mistake and hope that problems will magically vanish. We both know that won’t happen, right?

I’ve experienced the consequences of ignoring financial issues, and I don’t want you to go through the same emotional turmoil.

If I had acted just one month sooner, I could have avoided the stress and anxiety that followed.

Tackle your financial problems head-on and regain control of your finances as soon as you notice any of these warning signs.

Do not save what is left after spending, but spend what is left after saving.

Warren Buffett

12 Strategies to Tackle Financial Troubles

1. Creating a Budget to Manage Your Finances

Establishing a budget is the foundation of successful financial management. Outline your income and expenses and allocate funds to different categories. Adjust your budget as needed to align with your financial goals.

2. Building an Emergency Fund for Financial Security

An emergency fund provides a financial safety net for unexpected expenses or income loss. Aim to save at least three to six months’ worth of living expenses to cover emergencies.

3. Tracking Your Expenses for Better Financial Control

Monitor your expenses to identify spending patterns and areas where you can cut back. Use a budgeting app or spreadsheet to keep track of your daily expenses.

4. Cutting Unnecessary Expenses to Save Money

Review your spending and eliminate non-essential costs like dining out or subscription services. Redirect the money you save towards debt repayment or savings goals.

5. Using Cash or Debit Cards to Avoid Credit Card Debt

Limit your use of credit cards to prevent overspending and accruing high-interest debt. Opt for cash or debit cards to maintain better control over your spending.

6. Communicating with Friends, Faimily, or Loved Ones About Financial Matters

Discuss your financial goals and concerns with your friends, family, or loved ones to ensure you’re on the same page. Open communication fosters teamwork and strengthens your financial foundation.

7. Seeking Additional Income Sources to Boost Your Earnings

Explore side gigs or freelance opportunities to boost your income. Use the extra money to pay off debt or build your savings.

8. Focusing on Debt Repayment to Regain Financial Control

Prioritise paying off high-interest debt to reduce your financial burden. Consider strategies like the debt snowball or debt avalanche method to accelerate debt repayment.

9. Automating Your Savings for a Stress-Free Approach

Set up automatic transfers from your current account to a savings account to effortlessly build your savings. Automation ensures you save consistently and reduces the temptation to spend.

10. Reevaluating Your Financial Goals for Long-Term Success

Regularly assess your financial goals and progress. Adjust your budget and strategies as needed to stay on track and achieve your objectives.

11. Educating Yourself About Personal Finance and Money Management

Expand your knowledge of personal finance by reading finance books, articles, or attending workshops. Staying informed empowers you to make better financial decisions.

12. Seeking Professional Help When Needed for Expert Guidance

Don’t hesitate to consult a financial advisor or credit counsellor if you need guidance. Professional advice can help you navigate complex financial situations.

Bonus Tip: Try a No Spend Challenge

Participate in a “No Spend Challenge” to curb impulsive spending and boost your savings. Set a specific time frame, such as a week or a month, during which you’ll only spend on essentials.

This exercise can help you gain better control over your spending habits and kick-start your journey towards financial stability.

Final Thoughts on Signs You’re Bad with Money

Don’t beat yourself up over debt. Most importantly, stay positive.

During my sleepless nights, a random forum comment stating that “any debt can be resolved” motivated me to take action.

I chose to believe it and devised a plan. I was tired of worrying!

Now I live stress-free, even with debt. It’s all because I took action: I started budgeting diligently, searched for ways to earn extra money, and cut out unnecessary expenses.

I embraced a lifestyle between frugal living and minimalism. You can do it too. In fact, you owe it to yourself.

Take action today and regain control of your finances and your life.

Remember, any debt can be resolved!

Any debt can be resolved.

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