Studies are showing that income inequality in the U.S. is making it near impossible to make ends meet on minimum wage or raise a family on median wage just about anywhere in the country. Still, sometimes it’s not a financial struggle, it’s your spending habits. Here are some indicators that you might be your own financial crisis.
1. Credit Card Debt
Sometimes you’ll need to max out a credit card for something big and unforeseen, like an unplanned medical expense or vehicle repairs. But generally, these expenses can be avoided with careful planning or financial arrangements made with other parties. Using a credit card is quite literally spending money you don’t have, and as the interest rises and more of your cash goes into paying it off, you may find yourself trapped in a spiral of borrowing from the future.
2. You Don’t Know What Your Budget Looks Like
Maybe you can’t even tell if your budget is out of whack because you’ve never sat down to crunch the numbers. Drawing up a budget is time-consuming and it can be scary to take a good hard look at where your money’s going but the only way to make it less scary is to start fixing the problem.
3. You’re Using or Considering Payday Loans
Again, this is quite literally taking money away from a future version of yourself. While that may sound like a good idea now, you don’t know what that future you is going to need the money for. Ask yourself what’s going to change between now and then that’ll make having even less money next month an okay thing?
4. An Abundance of Unused Items in Your Home
If you have a big backlog of video games you haven’t finished or a closet full of clothes with the tags still on them, that might be a sign you can cut back spending on your hobbies. Everyone likes to stay current, but why not wait for prices to drop while enjoying what you have now? By the time your wallet recovers, winter clothes may be on clearance for next year, and Fallout 4 will be $20 with all the DLC included instead of $60 without.
5. You Hit Up Your Retirement Account
The American Dream sold us all on a certain standard of living. On top of that, it’s dropped us in a world with no shortage of ways to make it happen at the cost of our future wealth. We are no longer wary of options such as payday loans and credit cards, even getting a loan from your 401(k) is just another way of living beyond your means.