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This week on Money and Investing, Mitch Olarenshaw and I break down five red flags for financial security that you should not ignore. These habits can quietly drag you into long-term trouble if left unchecked. Here’s what to watch out for:
1. Spending more than you earn
Living beyond your means may start as a short-term fix, but if it becomes a pattern, it’s a serious issue. Emergencies like car repairs or home maintenance can happen, but consistent overspending signals a deeper problem.
2. Only having bad debt
Not all debt is equal. Good debt helps you grow, such as home loans or study loans with future returns. Bad debt, like credit cards or buy now pay later schemes, often finances short-term wants and adds no long-term value. If you’re using one card to pay off another, it’s time to reassess.
3. Not having a budget
A budget gives you control. Without one, it’s hard to track where your money goes. Start by calculating your income after tax, then track your fixed costs such as rent, fuel, and food. Small changes like skipping takeaway can create big savings. A solid budget also lays the groundwork for saving and investing.
4. Being late on bills and payments
Late payments come with penalties and can damage your credit history. It’s not just about the fee. It’s a habit that builds poor money management. Set up calendar reminders and never ignore bills. If you’re struggling, contact your creditors early and ask about a payment plan.
5. Borrowing from friends or taking out unnecessary loans
Borrowing money from friends or family often leads to tension. Using personal loans or multiple credit cards to stay afloat is a red flag. If you’re in this situation, consider consolidating your debt into a lower-interest personal loan, but only if you have the discipline to stop further borrowing.
For more info about Money and Investing, you can go to the podcast; read The Wealth Playbook: Your Ultimate Guide to Financial Security and The Wealth Playbook on Audible.
Disclaimer: Wealth Magnet Pty Ltd (ABN 52 618 868 830) trading as Australian Investment Education is a Corporate Authorised Representative (CAR no. 1255231) of Grange Financial Services Pty Ltd (AFSL No. 488609).
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
