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5 Warning Signals that Signal Future Financial Woes

Red-FlagMy last blog discussed why you should have open and honest discussions about money and how it will be handled before you enter into a new life together. Here are my top 5 red flags for potential future financial trouble. Read carefully and discuss with your partner.

1. You discover your fiancé’s credit card debt is more than 10% of his income. If you ask your fiancé how much he/she pays monthly and the answer is “the minimum”, watch out. You could be paying off debt for the next 10 to 20 years of your marriage.

2. Your fiancé uses the cash advance feature on his credit cards. There is never a good reason to do this. You pay higher interest starting at day one, even if you pay your bill each month or not. This demonstrates impulsive behavior.

3. Your fiancé puts everything on a credit card and does not pay off the balance each month. He uses the excuse that he will pay it off when his bonus comes in. In the meantime, he is paying 12 to 24% interest. As the old saying goes, patience is a virtue. The new couch can be ordered, (or whatever the purchase may be) after the bonus is paid. Impulse buying gets a lot of people into trouble.

4. No savings account. If your fiancé has no savings account, no matter what their job is, that should be a red flag. It indicates they spend all (or likely more) than they earn. That habit is difficult to break and can cause major problems in the future, especially if you are a saver.

5. Refusal to make a budget, or what I like to call a “spending plan” – this goes back to #4. My number one rule is pay yourself first. My number 2 rule is don’t spend more than you earn. Some people stick their heads in the sand because they don’t want to know how deeply in debt they are!
If you have observed any of the behaviors listed below, be aware. These can be red flag indications for future financial woes!

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), member FINRA/SIPC. NFPAS is not affiliated with Fish and Associates. NFPAS does not provide tax or legal advice.

Note: Due to industry regulations on communication, we are unable to allow for public comments on this blog. Please feel free to email me your questions and/or comments to kathy@fishandassociates.com. Thank you. Securities and Investment Advisory Services offered through NFP Securities, Inc., Member FINRA/SIPC. NFP Securities, Inc. is not affiliated with Fish & Associates.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Kestra IS and Kestra AS are not affiliated with Fish and Associates. Kestra IS and Kestra AS do not provide tax or legal advice.

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