Whether it’s your personal life, business or anywhere in between, no one likes to be left on read. Your finances might not have feelings, but you’re certainly not doing yourself any favours by cutting off contact with them. When we decide to ‘ghost’ our finances, it’s an active decision to ignore dealing with the realities of our situation. We’re choosing to refuse dialogue with the uncomfortable numbers and won’t admit why – it’s often easier not to look and focus on something else.
Of course, this is a form of conflict avoidance. It might be easier to forget about something in the short run, but unlike most people, your financial situation will catch up to you eventually. Debts, taxes and other obligations are understandably scary, but letting them be is no way to make them go away. In fact, they’re more likely to grow into an even bigger problem. You might not think you’re ghosting your finances, so let’s take a look at five signs you might be so you can make that call for yourself.
You can’t acknowledge your debt
You remember taking out that loan or applying for your credit card, but you don’t actively think about the money you are spending as not your own. Being able to acknowledge your debt is essential to managing your spending and savings behaviours in a way that is sustainable. Firstly, you should know the approximate balance of your outstanding debts. As hard as it might be to look at the number, it’s real, and it’s not going away unless you do something about it.
“Being aware of your debt shouldn’t mean you become a slave to your financial obligations.”
With that figure in mind, remind yourself that you are in debt every time you make a purchase. While it shouldn’t mean you are a slave to your financial obligations, it may make the difference when it comes to making intelligent financial decisions. Instead of taking the team out for dinner, remind yourself of your debt and pay down your highest interest rate credit card instead.
You can’t justify a budget
Just like not acknowledging your debt, disregarding the importance of a budget is another way to avoid the responsibility of tackling your financial reality. Budgeting isn’t bad when used correctly as a tool to guide your income and expenses. Knowing how much you spend and where is critical to making thoughtful changes in your lifestyle and habits. Creating a budget may motivate us to change, whether that’s a drive to earn more money or spend less with real-time, meaningful feedback each month.
You don’t understand critical financial concepts
Finance can be complicated if you let it. Understanding important financial concepts, such as interest rates, fees, charges and investment options, can play a significant role in how we manage our money. Financial literacy is a critical component of our lives. More than a third of Australians claim they do not have sufficient understanding to plan for retirement or interpret financial language. Start by searching for basic finance terms and taking the time to have a read, or better yet, consult your accountant or financial advisor.
You’ve never looked at your credit score
Your credit score (business or personal) is a measure of your financial responsibility, giving a guide to potential lenders on how trustworthy you will be with any credit they afford you. Paying back your debts in full and on time will boost your score, while missing payments and racking up charges will diminish it over time. Maximising your credit score is essential for securing future debt, as well as minimising the interest rates you’ll need to pay. Make a start by looking up what your current credit score is – it’s free!
You have faith in low-odd future income
Have you noticed people that seem convinced they will win the lottery or have a miracle business success out of nowhere? Perhaps that person is you. The irrational justification of future income, such as a gambling win, inheritance, or successful investment, is really just a way for us to feel comfortable in what we spend today – over and above what is otherwise responsible.
Take control with suitable finance
If you tick any of these boxes, it’s probably a good idea to address it sooner rather than later. Budgeting and taking control of your debts is one of the keys to a successful financial future. Examine your own behaviours and take action within your power to make a change. If you’re struggling to get on top of your debts, the right personal or business loan may make things easier by consolidating all your expenses into one cheaper, easier-to-manage repayment.
Capital Plus Finance is an experienced personal and business loan broker that has your best interests at heart. With a panel of many lenders, The Capital Plus Finance team will do everything we can to help you secure a suitable finance solution. Please give us a call anytime to find out more or to have an obligation-free chat about your personal and business situation.