There's probably something in most of us that would like to wave a magic wand or perform some sleight of hand to make money troubles just disappear. That common but irrational wish prevents us from facing financial realities.
Magical thinking gets in the way of success no matter what goal we have in mind—to ace an exam without studying, to become a concert pianist without practicing, or to pay down credit card debt while running up more debt. We all might wish our situations would improve without having to make painful choices.
Here are some key signs that your finances are in trouble:
Any one of these situations is stressful enough, and none is sustainable. If you don't have an emergency fund, it's a matter of time before you're making overdrafts and juggling bills, paying one this payday but waiting to pay another. Collection calls follow, and so it goes.
Compounding—when we're talking about interest accruing over time as we save and invest—is a good thing. But a problem that starts small, left unattended, will compound over time, too. And in this case compounding is not a good thing.
Neglect doesn't fix money issues—action does. Here are just a few remedies:
Approach your money challenges with optimism. Once you commit to setting up good financial habits, your positive steps also will compound over time.
And remember that the people at your credit union have tools to help you make the most of your money. They are ready to help you apply solutions that will replace your warning signs with signs of genuine financial progress.
Ask for a session with a credit union financial counselor, or for referral to a counseling service your credit union staff can recommend, to learn other practical ideas to reverse financial warning signs.
Once you replace anxiety about your money with the sense of confidence and competence that comes from establishing good habits, you won't be tempted to ignore warning signs again.
Your credit union personal finance professionals bring you this website and other tools to help you make the most of your money. The Financial Fitness Challenge continues to look at ways you can make better financial habits no matter what condition the economy is in.
Each month we randomly select five winners to receive $50 Visa gift cards; we choose each month's winners only from that month's entries, so enter every month. Remember to register for the Financial Fitness Challenge.
Susan Tiffany, CCUFC
2011 Sharonview FCU
http://www.ncua.gov/ Federally Insured by NCUA. Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency.