7 alerts for a money crunch!

If you feel you are not managing your money right, start doing
something about it. Small strategies will help go a long way! Here is
a sample of a few things to start with, use your judgment and build
on it. Give it plenty of thought, time, effort, patience, commitment
and enforce a plan of action.

a. Start a savings bank account that is different from your salary

account. Determine how much money you would need to
comfortably and prudently manage your monthly expenses then
transfer the rest automatically to your savings account, every
month and keep it inaccessible for routine needs and curb any
temptation to eat into these savings.

b. Prepare a budget and stick to it.

c. Keep your credit cards locked away atleast until you take control
of your spending habit. One can also use a credit card to wisely
keep track of monthly payments, but that is for people who can
differentiate between a want and a need. Until you find yourself in
that place, lock it away!

It is better to start as early as possible before you find yourself in a

financial mess. Before you land yourself in big trouble learn to
implement some rescue measures well in advance!
Here is an alert list that warns you of an impending disaster with
your money management skills. Use it as your checklist.

Topics
 1. You are terrible with bills and payments!
2. You use your credit cards excessively and take loans often
3. Obsessive compulsive impulsive shopping
4. You are a debt juggler!
5. Cheques that bounce!
6. Late and default payments
7. You don't have back up funds in place!

#Alert 1 - You are terrible with bills and payments!

Maybe its forgetfulness or a laid back attitude or a chaotic lifestyle,
whatever the reason, if you are laden with unpaid bills, get fined for
late payments 70% of the time, bounce a few cheques every 10
months then its time to take stock of your organizational skills, at
least in your personal finance department.
Keep a monthly tracker, set reminders on your mobile, keep an
online calendar that beeps when bill, insurance and other payment
deadlines arrive, choose whatever means that you are comfortable
with to meet the objective of being methodical with payments. Sort
bills in a folder, keep them accessible at one place.

# Alert 2 - You use your credit cards excessively and take loans often
The golden rule is to spend less than you earn. Distinguish between
your needs and desires. If you desire something too expensive,
which you are tempted to purchase with your credit card, think
twice. Don't splurge, see if it should be on your priority list. If it is a
must have and you need it that badly, save for it. That will help you
decide if you feel it is worth the effort.
Remember, too much debt will eat into your monthly spending and
put a road block to any kind of saving, as you will be busy paying
off your credit card bills and monthly EMIs on personal loans for you
to set aside anything for a saving. Instead try to reap the power of
compounding interest by saving some funds. Once you are sitting
pretty on a pile of money, you could then indulge in a well deserved
vacation or that powerful music system, you always wanted as part
of your relaxing Sundays.

# Alert 3 - Obsessive compulsive impulsive shopping

Well, shopping malls, branded stores and supermarkets lined with
tempting new entrants were designed with you in mind. These
places you should avoid like the plague, if you are not someone
who checks the price tags of goods but instead rely on the "I want it
right NOW!" mind frame. Don't stack your living room or your
kitchen or your fridge, with things that are purchased without any
rhyme or reason.
Take the example of Rema for instance, she has to try out new
brands, interesting gizmos that she has no use for, antiques that
she fancies endlessly and also food stuffs, the packaged, canned,
ready to serve, frozen variety. Her living room is stacked with odd
antique pieces that cost her a fortune, which she does not even
have the time to take a second look at, her fridge overflows with
canned foods that are well past their expiry dates and she owns
three different kinds of mp3 players which she does not use! You
are now thinking what a waste of money! Exactly!
It is painful routine, but make it a habit. Keep a tab on your money
outflow, make a note of what, where, when, how you spend. At the
at end of every month, track your bills using an excel tracker or a
good old accounting notebook and shred bills that are not required
retaining warranty papers and bills, for goods that can be returned.
Rema did that and realized how much more she could save with a
little discipline!

Alert # 4 - You are a debt juggler!

Do you have a priority list of debts that you clear based on how
heavy the late fee or charges are going to be or when next you
need to repeat the use of that particular service? If this is the kind
of lifestyle you lead, you need help! Find ways to cut back on your
monthly expenses and pay off all your dues as quickly as you can.
Don't let yourself into such a pins and needles situation again!
Always cut back on spending, conserve on resources until to
achieve control over your finances.

Alert #5 - Cheques that bounce!

If you think you can write cheques that cannot be encashed and get
away with it scot free. Think again! Bounced cheques come with
hefty fine amounts and establishing such patterns will not bode well
for your financial track record.
Alert # 6 - Late and default payments
It can be minor expenses like a fine for the video or book that you
returned late or consistently incurred late payment charges on your
credit cards or EMI payments. The former just piles on
miscellaneous expenses that end up adding to a significant
percentage while the latter can lead to big trouble. Making a habit
of this consistently can get you labeled as a defaulter. Your interest
rates and lending rates could increase at an accelerated pace on
the basis of your track record for late payments.
Defaults will be reported to CIBIL. If a pattern is notice you will find
taking a loan or applying for a credit card in future extremely
difficult. CIBIL keeps track of all your credit and generates a report
that clearly shows your past repayment track record. Nowadays
Banks are keeping a close tab on these credit reports and base
their loan decisions on the financial health of the loan applicant.

Alert # 7 - You don't have back up funds in place!

Can you survive a job loss for six months? Do you have some funds
stashed away for such emergencies until you gather your reins and
surge ahead confidently with a new job and a new plan for the
future in place? What about a medical emergency? Do you have
resources that you can tap into for such a scenario. If the answer is
NO, then it is time to take a serious look at how you manage your
money.