Jeff Rose of Good Financial ¢ents wrote an article last August that really floored me called 21 Warning Signs You’re Financially Unstable.
By God’s grace my wife and I have managed to keep all of our bills paid since we decided I was going to start my own business (that’s a nice way of saying I got the pink slip).
But we’ve only stayed on top of our bills by making a lot of sacrifices, taking shortcuts (i.e. making bad financial decisions), and lowering our standards.
When I read through Jeff’s article, I scored a 12 out of 21. I think that means my household is financially unstable which means you should go read something else.
1. You Sometimes Need to Borrow to Make Your Budget
This one is hard to answer. Our one credit card stays maxed out, but we always use the principal we pay off with the minimum payment to pay other bills.
Is that borrowing or maintaining?
I think that the spirit of the point would require me to count this one. So…
2. Your Emergency Fund is Non-Existent or Close to Empty
Yep. Haven’t had one that lasted more than a few months.
3. You’re Maxed-Out on One or More Credit Cards
Yep. I won’t tell you what the balance is until it’s paid down low enough to not hurt my pride.
4. Your Credit Scores Have Been Dropping
I’m not going to count this one because I honestly don’t know what our credit scores are and haven’t for a long time.
Update (7/1/16): I got our credit scores and they’re in the good/very good range. That surprised me, but I’m not complaining.
5. You Live in Mortal Fear of Losing Your Job
As I mentioned before, I’m self-employed. You can’t lose what you don’t have, so I’m not going to count this one.
6. You Fantasize About Having Better Finances
Fantasize is a strong word, but I do consider the possibility from time to time. This one gets half a point.
7. You’re Already Pretty Certain You Won’t Ever Be Able to Retire
I’m actually a pretty optimistic person and I believe my ship will come in. Am I delusional? We’ll see.
8. You Lose Sleep Over Finances More Than Occasionally
Maybe I’m just used to things the way they are. I sleep like a baby.
9. After You Pay Your Bills You’re Broke
10. You’ve Borrowed Money From Family or Friends
I’ve borrowed money from family AND friends. Do I count this one twice? Nah.
11. You’ve Seriously Considered Bankruptcy or Debt Management
It makes me sad that there’s an entire industry built around these concepts. I am glad, though, that I haven’t had to consider this option.
12. You’ve Recently Been Denied Credit
Haven’t asked for it.
13. You Avoid Money Discussions With Others – Even Your Spouse
My wife and I are blessed with a pretty healthy marriage. It’s not easy to talk about financial problems, but we’re much happier when we face the issues head-on instead of keeping each other in the dark.
14. You’ve Had to Delay or Eliminate an Important Major Purchase
We needed a van when we had our fourth child so that we could all go places at the same time. It took us four months to find one we could buy for $1700.
15. You Seem to Have More Stuff Than Your Income Would Suggest
Another hard one to answer. I think the only thing that confuses people is our home. We have a much nicer home than we should.
16. You’re Planning Yet Another Debt Consolidation
Never had one, so can’t plan a second.
17. Late Fees and Overdrafts Are All In a Day’s Work
This happens occasionally, but I hate them and avoid at all costs. Half a point here.
18. You Intentionally Slide Bills Into Next Month
I actually hadn’t thought of this and don’t suggest you do either.
19. You Defer Maintenance Projects on Your Home and Car
Unfortunately, this is a huge one for us. There’s always something, right? And it’s usually been hanging around for a while.
20. You’re Going Without a Significant Type of Insurance Coverage
My wife and children are all covered with health insurance (albeit by Medicaid — it’s embarrassing just to type that!). I am covered too, but it’s a $10,000 annual deductible, so am I really?
I have a good term-life policy on myself, but not my wife. I would be in serious trouble without her.
Definitely one point here.
21. You’re Not Certain You’ll Be Able to Make Next Month’s House Payment
Always confident. Never certain. If that makes sense.
The Final Assessment
A 57% financial instability score.
There’s definitely a lot of room for improvement.
If you can relate to any of the areas we’re struggling in, please consider sticking around while we figure this out.
Should you? Maybe. Maybe not.
It’s up to you.