San Diego, CA - Just like an automobile engine's idiot lights come on when it needs oil, or other sort of service, personal finances are the same way. Only difference is the financial danger signs manifest themselves in a form other than an idiot light. Ignoring such warnings in the handling of money can become very expensive, also just like ignoring an idiot light on your car.

Many consumers, however, aren’t always honest with themselves or other family members about their own financial situation. Not wanting to exhibit their lack of financial knowledge, to avoid embarrassment they keep their financial matters, good or bad, to themselves. Often, credit/debt and other financial counselors talk with clients who are way over their heads in debt, yet their clients genuinely feel that their credit practices are just fine, despite the growing debt, because "they can handle it."

If you have a debt, credit or other financial problem, the first and most important step is to admit to yourself there is a problem and it is time to do something about it, even if it means getting outside help. This is also a difficult hurdle to clear for most people because they feel that to do so would be an admission of financial failure. The “real” failure, however, is in not getting help and, instead, digging oneself deeper and deeper into a financial hole.

Whether you think you’re having a problem or not, take a few moments to reflect on your current financial state by reviewing the following “financial danger signs.” If any of them feel close to home, you may want to consider contacting an accredited, nonprofit, credit counselor for an appointment.

Certain Financial Idiot Lights and Danger Signs:

1) You use your credit cards regularly and rarely pay more than the required minimum payment. Simple mathematics makes this approach a one-way road to disaster. Eventually, your debt will become so high that you may not even be able to make the minimum payment.

2) You’re often or always late on regular monthly bills. If you find yourself receiving the new bill before paying off the previous one on a regular basis, then you simply don’t have control over your finances. These monthly bills should represent your basic needs, so you should be able to pay for them without any problem or delay, however if there is premium cable or other expensive subscriptions, perhaps you need to reorder basic needs.

3) You get in frequent arguments about money with a spouse, partner or roommate. This is usually a sure sign that you and the person you’re arguing with are overly stressed about mutual finances, and probably for good reason.

4) You purchase necessary consumable items, like food and gas, with a credit card. A healthy attitude toward credit is one in which you only use it in emergencies or to pay for important items, with the intention of paying them off quickly, usually within 90 to 120 days.
Otherwise, credit is simply a convenience, however, it comes at a very high price.

5) You have no idea what your total debt is. If you can’t estimate within $500 or $1,000 what your total debt is, your spending is way out of control. Chances are when you receive the monthly statements, you don’t even look at the balance, instead just looking to see what the minimum payment is, and that’s not a good approach to using and managing credit.

6) You have recently taken out a cash advance on a credit card to pay a monthly bill. Typically, credit cards charge a higher interest rate and allow no grace period on cash advances. They also charge a service fee, so it simply doesn’t make financial sense to pay your bills like this on a regular basis. It is far better to have a spending-plan and pay-as-you -go.

7) You have paid overdraft fees on bounced checks, on both ends, i.e. at your bank and also fees at the bank of payee. OR you have had a checking account closed by a bank because of too many rubber checks.

If you’re seeing two or more of these financial idiot lights, a/k/a danger signs, in your life, it is essential that you do something to turn your credit based spending practices around quickly. Otherwise you may be facing collection or legal actions by your creditors sooner than you might think, because some of your credit card agreements may contain a universal default clause.

People whose finances are in a downturn, often discover they are paying way too much for things because they fail to comparison shop. That, like borrowing to meet regular expenses, is another form of overspending. Overall, the best way to increase your personal cash flow is to be conscious of how much money you spend each day and why. Comparison shopping is the consumer's best, but least used, defense against overspending.

For information about mending your spending or how to set up and implement a spending-plan (with a one page work sheet), please visit the ICFE's Web page at: http://www.icfe.info.

To receive the same information by mail, please send $1 and a self-addressed, 60 cent stamped envelope to: ICFE, Money Helps PO Box 34070 San Diego, CA 92163-4070.