6 signs you need help managing finances

25th February, 2015

So you have managed your money well most of your life and without the help of anyone else. You have your pride and don’t want to seem needy, but you wonder if you could use help managing your finances. What are the signs, and what should you do about them?

1. You have credit card debt

Once of the most common signs of trouble with finances is when you are unable to pay off your credit cards monthly and can just about make the minimum repayments. If you can’t close your purse or wallet because of the number of store and credit cards, it’s time to sit down and assess your debts. Maybe seek help from a debt counsellor or a financial planner — and put a plan in place to manage or consolidate debt and focus on repayments.

2. You receive late notices

Another common sign you need help is that you cringe when utility bills or rates notices arrive. Many of them have overdue stamps or late payment penalties on them. It’s time to budget properly for these bills. Maybe move to a monthly payment plan so that you do not get hit with quarterly or annual bills that just seem too hard to cover. Do not ignore bills by shoving them in a drawer or leaving them unopened. Most credit providers and utilities are required by law to work with people in financial hardship.

3. Your kindness is abused

For older readers or those with too kind a heart, please be aware of the friend or family member who starts to drop around all too frequently — and the conversations always end up with a veiled or outright request for monetary assistance. I know many people who just feel very sorry for others and try to help. This can get out of hand, and your savings can be depleted before you realise the damage. If you feel your trust and kindness is being abused, then talk to another family member just to get a second opinion.

4. You aren’t on top of business finances

For those in small business, if your end-of-year financial reports are not received until near the end of the following tax year and the results are a surprise, then you need assistance. While it may all seem fine as long as bills are paid, being in control of your business requires timely reporting. You must be informed so that you can be proactive in your response to fund obligations, such as superannuation and tax payments, equipment financing, and funding the severance pay of a long-time staff member with built-up holiday and service leave.

5. You are using home equity for lifestyle purchases

Beware of equity dipping! Examine your debt levels now compared to five years ago. Asset prices have risen significantly in that period, but we find that many people have been dipping into to their mortgage accounts to fund lifestyle assets, such as cars, pools and holidays. You need to be on top of your mortgage by your 50s so that you can start saving for retirement. The last thing you want is to retire with the uncertainty of a mortgage over your home and unpredictable interest rates ahead.

6. You don’t have plans in place

Each week, more than 1,700 new cases of dementia are diagnosed in Australia — approximately one person every six minutes. This is expected to grow to 7,400 per week by 2050. Currently 24,700 people in Australia from ages 30-65 live with Younger Onset Dementia. Please plan in advance, as it is often too late once you have lost capacity. I believe everyone over 18 years of age should have an Enduring Power of Attorney who can act on their behalf in relation to financial matters should they be incapacitated.

There are a number of great sites for more information on this and other estate planning matters. To learn more:

Don’t let your pride or excuses get in the way of seeking help, and don’t despair because there is assistance out there. You are not the first and will not be the last to need help getting back in control. It is important to address financial issues upfront, but it is never too late. 

*source: Summary of dementia statistics in Australia by Alzheimer’s Australia