Manage Money: 10 Signs You’re Headed into Financial Trouble

My friend had a stable job making $85,000 a year with moderate debt that included a mixture of credit cards and student loans. He lived a comfortable lifestyle often eating at fine restaurants and traveling. He shared with me that has all changed.

My friend who was never late on bill payments was now facing some financial issues. He shared his stress from the creditors’ phone calls. “It came out of nowhere,” he states, ” I thought I was managing my money very well.”

For many people making $85,000 a year would be a financial windfall but my friend was living a dark secret. He was living paycheck-to-paycheck. He held onto a belief he was always going to make more money. My friend, like many people I’ve met, have shared how their spending habits didn’t need to be controlled because they could afford the purchases, bills and credit payments. He was ill-prepared for the unexpected that one traffic ticket would send him off to the financial abyss.

There are many of us at one point in our lives that have gone through a financial meltdown. We didn’t have an emergency fund so we dipped into long-term savings. We’ve forgotten to pay a bill on time even if was just a few days later. We’ve paid more on fees and financing charges than we’ve saved.

So are there warning signs that we’re headed for financial trouble?

10 Financial Warning Signs

My friend never saw the red flags during those blissful years of “financial indulgence.”

Here are ten financial warning signs that might indicate you are headed into financial trouble. Why is it important to know these signs? Because knowledge of your actual situation creates a drive to resolve them.

10 Signs You’re Headed into Financial Trouble

1.  You associate savings with purchases and not with a savings account. Buying things at a discount is good purchase management but not saving money for short, mid and long-term goals can mean disaster.

2. You don’t know how much debt you have. The biggest hurdle preventing many from achieving financial freedom is not knowing the total amount of debt owed.

3. You have credit cards that are near or above the limit. You make the minimum payment in order to charge on the credit card’s new available balance.

4. You make late payments on bills or paid a checking or debit card overdraft fee. This is an early sign you may be losing control of your money.

5. You carry a revolving balance on your credit cards. Holding balances on credit cards month-to-month can lower your credit score. Thirty-percent of your credit score is derived from your credit usage (the ratio of used credit to available credit).

6. You use credit card checks or cash advances to pay your bills. These credit card features cost money from extra fees or higher interest charges. It may seem convenient but can add to your debt load.

7. You were turned down for a credit card or loan. This may be an indication that lenders find you a high-risk borrower showing you may have overextended yourself. Credit scores used to determine your creditworthiness is a tool creditors use to determine the potential risk of default or bankruptcy in a few year.

8. You borrow money from your 401K to pay for monthly expenses. Your 401(k) is part of your long-term savings strategy used for retirement and not to pay for debt or recurring monthly expenses. A 401(k) loan or withdrawal can mean penalties, fees and impact your returns.

9. You believe the lottery is your path to retirement. You have a higher chance of being struck by lightning than winning the lottery jackpot. Your retirement should include a robust savings and investing plan that includes 401K contributions, IRAs, brokerage accounts and life insurance.

10. You hide your financial situation from your partner. Money can erode the strongest bonds among partners causing arguments and divorce. Lying about your spending habits and hiding bill statements will cause more grief down the road.

If you find yourself agreeing to a few of these, it may be about time to sit down and assess your financial situation completely. The first step in preventing a financial meltdown is to figure out if you may be on that path.

In order to create a solution, you’ll need to acknowledge your actual situation. You can begin bypulling your credit report from, learn what your credit score is by using free services like CreditSesame. Then, start the budgeting process that will help you uncover how and where you are spending your money. There is a solution for everything and it’s just a matter of accepting where you are today. Then, it’s about the time and initiative in creating a plan and taking control.

Live the life you want to live but you need to make sure it is affordable. If it isn’t affordable then you might want to consider a different lifestyle or figure out ways to afford that lifestyle. You may need to create a plan to focus on debt repayment for the next year, find ways to supplement your income or invest time to increase your skills to get a higher paying job or promotion.


This article comes from our friends at Phroogal. It was originally published on November 19, 2015 and can be found on their website here.

The Rebirth of YOLO to Live The Best Life in This Lifetime

After spending 30 days on the road and participating in 37 events, there was one message I shared that resonated with people all across the country. It might be surprising to most because it’s an acronym we used years ago but is finding new meaning today. That acronym is YOLO for You Only Live Once.

YOLO in the height of its pop culture usage was used to mean a carefree attitude and decision-making with no consequences. It highlighted the impulsive behavior that emphasized the moment without thought to the future.

But as we’ve matured into adulthood we’re finding new meaning for the phrase to live the life we’ve dreamed without the financial stress associated with mindless consumption.

If this is truly the only life we have to live let’s make sure it’s one where time and money was spent consciously on building and living the life you love. You can continue to exchange your time for money but time isn’t a renewable resource. Once time is spent it’s gone.

So how do you create a life that’s worthy of just one lifetime?

The answer is having a clear lifestyle goal not just financial goals. A lifestyle goal is how you live while financial goals are specific to things that revolve around money. The lifestyle goal is the big “why” and the top-level reason you’ve decided to exchange your time for work.

In other words, the lifestyle goal is what you hope to achieve and create unlike financial goals that are things specifically purchased for consumption.

It may be easier to identify financial goals such as owning a home, living debt-free, driving a luxury car or traveling the world. However without a clear lifestyle goal, you may find yourself making purchases or setting financial goals that take you further away from the life you actually want to live.


Phroogal YOLO Money Mindset


To illustrate, buying a home is a financial goal that can add to a lifestyle you plan to create however if travel experiences are the memories you hope to make then buying a home may derail you from living that lifestyle.

Many people have a hard time figuring out the lifestyle they want to live. This could be due to a number of factors not limited to financial issues.

It might be a challenge figuring out the lifestyle you want to live but I’ve found people have an easier time discussing their interests. If you aren’t able to define the lifestyle you want to live at this moment, focus on your interests and make decisions based on creating an interesting life. A life you could proudly describe as YOLO.


This article came from our friends at Phroogal and can be found on their website here.

6 Money Mindset Lessons for Any Generation

As a millennial, I dream big and everything I do is intentional and serves a purpose. I wasn’t always this way. It took years of professional success, financial distress and low personal satisfaction to get to where I am today. I am more mindful of the decisions I make and understand the implications my financial knowledge has had in my ability to live my dream lifestyle.

I am still on a quest for complete financial freedom and each and every day with the decisions I make I continue to lift the burden of the past mistakes.

This summer I went on a road trip called The Road to Financial Wellness. We met with thousands of people in the 30-day road trip and had deep meaningful conversations with hundreds of people from every generation. The conversations may have taken place in 30 different locations around the country but the conversations were very similar.

We are a purposeful bunch and we care a lot about social impact. We also understand the importance of financial freedom in order to do things of significant importance. However, many millennials are straddled with student loan debt, low wages compared to cost of living in the cities they reside, and difficulty in finding affordable housing. Older generations face concerns of their own with credit card debt, stagnant income and less than perfect credit with the added stress of retirement age approaching.

Many individuals in every generation is seeking financial freedom but the commonality across generations is the lack of awareness regarding their relationship with money. Ultimately, a lack of understanding their money mindset that’s perpetuating questionable financial decisions preventing them from achieving financial freedom.

What is financial freedom?
The answer varies. Some define financial freedom as having no debt or a million dollars in retirement savings. While others define financial freedom as the ability to do anything without financial constraints.

I define financial freedom as the ability to live a lifestyle devoid of the anxiety over having too little or too much. Financial freedom is the state in which I control money and I am not controlled by it. I don’t fear the scarcity of it or the temptations of abundance. Financial freedom means money is a tool not an end goal.


On the road trip, I focused the conversations on mindset and the relationship we have with money that hinder or help us achieve financial wellbeing.

Here are six money mindset lessons that truly resonated with every generation:

  1. Define the lifestyle you want to live. We’re often focused on financial goals but as millennials we need to understand how those financial goals contribute to the lifestyle. Many did not want to commit to a monthly car payment or plant themselves with a mortgage. It’s important to understand the life you want to live and then identify the financial goals that support that lifestyle.
  1. Money can by happiness. One thing I’ve learned from the wealthy is that money does buy happiness and those who understand that make better financial decisions. Knowing that money can buy happiness will make it easier to choose long-term happiness over short-term satisfaction. Money provides for the needs that allow you to use the rest of your time on creating.
  1. Pay yourself first and have a purposeful savings strategy. Make sure you identify how you plan to spend your money today and how you’ll spend it in retirement. Prioritize savings so you can retire sooner rather than later. The more money you have saved towards retirement the sooner you’ll be able to say goodbye to your job.
  1. Watch out for lifestyle inflation. We might tell ourselves that we’ll wait to save or contribute to our company’s 401K after the merit increase or promotion. There will never be a better time to start saving money. Lifestyle inflation causes us to spend at the same rate making $75,000 as we did making $30,000.
  1. Don’t keep up with the joneses. Spending your hard earned cash to keep up with someone else’s lifestyle will lead to financial disaster. Be mindful that when you’re keeping up with the joneses your money is spent to live another person’s dreams not yours. 
  1. The purchase of things and experiences are the exact same thing. Whether you decide to travel around the world or buy that luxury car, spend only on things and experiences that matter to you. For most of us, experiences trumps things but I can tell you that driving my BMW on the winding roads of Napa Valley was definitely an experience. Understanding what you truly value will make you spend on things that add value in your life.