Today I’m going to share with you 7 Financial Warning Signs You Need To Watch For.
I know from personal experience, when I was getting into credit card debt and having trouble paying my basic bills.
I also know from clients who I’ve worked with, you have had issues like stress over bills, the inability to pay basic expenses and having their car repossessed.
Read the warning signs, and follow the instructions on how to improve your financial health!
#1 You Don’t Know How To Calculate a Percentage
This is a big indicator that you are having or will have difficulty growing your money.
The reason is that most of the money world is measured in real numbers and in percents.
Your car loan, mortgage, credit cards all charge you a percent.
In addition you can also earn a percentage in interest on savings accounts, or calculate the percentage your home increases in value.
In our Finance Freedom Mastermind, I’ve found that many of my clients do not know how to calculate percents, and so they do not understand how the percentage rates they pay or earn affect their incomes or wealth.
We spend time weekly calculating percentages and practicing money math skills until all members are comfortable with the numbers.
Take the time now to learn percents are calculated, and how they can affect your money.
#2 You Don’t Know How To Calculate Your Net Worth (Balance Sheet)
In terms of money, people understand and compare the wealth of others by comparing their Net Worth or Balance Sheets.
Yet I’ve found that when I was bad with money, I had no idea how to calculate my Net Worth and had no idea what a Balance Sheet was.
It took me some time to learn, but it wasn’t hard. It’s easier math then percents. It’s just adding up everything you have and everything you owe.
Then you subtract the two numbers.
If you have a positive Net Worth, then you have more money than you owe.
If you have a negative Net Worth, then you owe more money than you have.
If you have a decreasing Net Worth over time then you are getting poorer.
If you have an increasing Net Worth over time then you are getting richer.
In our Finance Freedom Mastermind program, we calculate our Net Worth every month and track it in a table to see how it changes from month to month.
#3 You Don’t Know How To Calculate Your Cash Flow (Income Statement)
Have you ever wondered where your money went at the end of the month?
Then you are like most people and you don’t track your spending.
Calculating your Cash Flow or Income Statement means that you are calculating how much you are making and adding it up to get your income.
Then you are calculating what you spend money on, adding it up to get your expenses.
Then you subtract the two numbers.
If you have a positive cash flow then you are spending less than you are earning. This leaves you extra money in the bank.
If you have a negative cash flow, then you are spending more than you are earning. This leads to credit card debt, or using up your savings or home equity, etc.
This is also something that we calculate and track monthly in our Finance Freedom Mastermind program.
#4 Hearing Money Words Make You Uncomfortable or Tired
I remember when I first started learning about money, and I thought it would be so hard to calculate my Net Worth, and I thought figuring out how to buy a property would be so complicated.
Hearing words about money made me uncomfortable.
I would actually avoid thinking about it.
I have a client who used to have her mind shut off when money terms were discussed.
Some clients get sleepy.
If you hear words like Net Worth, Assets, Liabilities, Earnings and so on and you feel uncomfortable or tired, then it’s time for you to increase your money vocabulary…little by little.
If you know you want to learn more about money terms and need help getting started, then consider doing the One Year Finance Freedom Makeover.
#5 You Are Embarrassed About Your Money
I used to be embarrassed about my money situation.
Now I openly tell people that my Net Worth is a little over $300,000.
I am fine with discussing earnings of our AirBnB business, our Cash Flow, and different investment ideas we have.
If you are embarrassed about money that is a warning sign for you to take seriously.
It’s time to pay more LOVING attention to your money matters.
If you want to learn how to create financial freedom in a group of like minded and caring individuals, then consider joining a Finance Freedom Mastermind.
#6 You Don’t Have A Written Financial Plan
Ever hear that if you are more likely to have a successful plan if you write it down?
Well, it’s important to write out a financial plan if you want your finances to do well.
If you’re like most people you have never written out a financial plan for yourself.
Well, now is the time to start.
You can get a fiduciary advisor to help you with one.
If you want one that you can do yourself CLICK HERE.
#7 You Don’t Make Passive Income
The only way for you to become financially free, is to learn how to create passive income.
This is money from investments or businesses that you are a passive owner of.
Think about it, if you have to work all the time to make enough money to live then you are bound to your work.
You want to release yourself from having to work for money.
The only way to do that is to understand how to create money more efficiently, and to learn how to invest your earnings to create money for you.
If you want to learn more about how to create passive income for beginners, then CLICK HERE for the 7 Day Finance Freedom Challenge.
Conclusion
Understand and learn from these 7 Financial Warning Signs You Need To Watch For.
They are there to guide you and give you clarity on your finances.
If you are like most people, you might be thinking, great, I’ve got most of these warning signs!
The good news is that you can change your financial health.
Start by addressing each sign one at a time, and you will see your finances improve over time.
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