Personal finance means the management of individual or family finances. This means that you are able to pay for day-to-day expenses as well as  for emergencies. At the same time, you are saving some part of the Money you earn for investment and retirement.

Personal finance, sadly, is not a subject that is taught in school that is why so many people are clueless as to how to manage their own money. This is not exclusive to the younger generation. There are also adults who have endangered their retirement funds because of their lack of knowledge in money management.

Here are some of the signs that will make you think twice.

1. You keep on waiting for your salary to come in

It is five days away from payday and you are surviving with a few pesos for food and transportation every day.

Whereas when you received your salary, you spend it with getting expensive coffee and buying all the things that you don’t need. Heck you don’t even budget.

2. You don’t have a savings account

No! A payroll account does not count. It is essential for everyone to have a savings account for them to create their Emergency Fund.

Experts claim an emergency fund should have at least 3-6 months’ worth of income to cope with emergencies or unexpected changes. The emergency fund is used when your car suddenly breaks down or you have to pay the hospital a visit due to an illness or worse because you quit or lost your job, or you have to pay your mortgage, you will need this money to take care of your expenses.

People in a financial mess do not have emergency funds so they borrow money for such cases, they take a loan or cash advance, therefore incurring more debt.

3. Paying credit card bills is a struggle every month

Worse is if you only pay the minimum on each of your credit card bill. You could be saddled with credit card debt for 5 years, or even 10 for that purchase you made recently.

And if your answer to your financial woes is to apply for another credit card because what you have are maxed-out, or near their credit limit, then you undoubtedly are headed to a financial crisis!

4. Frequently asking your parents to help out with your expenses 

The worst thing about not having money during emergencies is asking money to cover for those emergencies.

And most of the time, we ask Mom and Dad if they can lend us money, nothing is wrong with that – all of us did that for at least 18 years but if you are working for more than a year now how can you ever pay them back for the money you owe them?

5. You are not even thinking about your retirement

How about your retirement? You may be young but this is the perfect time to think of your retirement fund.

When your retirement plans involve winning the lotto, then you’re in trouble. Some people spend money buying lotto tickets hoping that a windfall will come their way to cover their retirement.

Bottom line

If you somehow find yourself in any of the above situation, it’s not too late to learn the art of delaying gratification. Self-control is your best bet. If you can’t afford it, wait until you have enough cash to pay for it. If you are a young professional without any dependents, it wouldn’t be impossible to set aside even just P1,000 as your monthly savings.

Read More: 20 Ways To Save Money Right Now

How do you do that? Start keeping track of your expenses which should never exceed your income. List down where you spend your money on a given month and see which portions you can cut back. If only you would limit your booze or think twice before getting that new iPhone, you would have saved a lot already!

Learn how to budget and live within your means to avoid financial disasters!

This article was first published in December 2014 and has been updated for freshness, accuracy and comprehensiveness.

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