Ditch Debt With Dignity

What are Financial red flags in our everyday lives?

March blog cover - 2023

A red flag is a warning and the chance to address a potential problem early on before it causes long term damage. Financial red flags can occur in our everyday lives and it’s important we learn to recognise these and have the courage to understand that we may be in financial danger early on so we can take steps to address, rectify and improve our long term financial situation.

Consider a financial red flag like a warning signal pointing to something that needs a little more attention before it becomes a much bigger problem – and much harder to deal with! 

What are the Financial Red Flags?

At Ditch Debt with Dignity we focus on 7 key areas when it comes to financial red flags:

  1. Having to pay for essential items on your credit card
  2. Having no emergency savings meaning you have to rely on credit
  3. Using your credit card and not being able to pay the balance off in full 
  4. Using your overdraft every month
  5. Being unable or feeling anxious about looking at your bank statements
  6. Using your debit card and being unsure if you have enough in your bank account to make the payment.
  7. Not “knowing your numbers” your income, your fixed expenditure and what’s left for you to spend on variable expenditure.

What are some of the things we can do to avoid and address these red flags? 

The best place to start is to recognise that you have some (or indeed all) of these financial red flags and to try and not panic. It takes courage to review your finances once you have recognised some financial red flags and to acknowledge that you need to make some changes to address these. 

Knowing your numbers is key to improving your financial situation.

We would encourage you to complete the Ditch Debt with Dignity Money Magic Workbook (download it for free here) so that you can understand your numbers and see what surplus income you have (if any) to help improve any of your red flags. This step is also important to understand where you could make some small changes on a monthly basis to start to see improvements with your finances. 

Recognising and addressing financial red flags may seem difficult to begin with but in our experience taking time to understand your numbers (with the Ditch Debt with Dignity Money Magic workbook or any other method) and then discussing it with someone like our team, can improve your financial position and hopefully prevent long term financial stress and potential debt.

Moving on from Financial Red Flags. 

Even small steps like a shopping list to help stay on budget before going to the supermarket can make a big difference. However If you do not have any surplus income to help improve the situation and you cannot establish a way to increase your income or reduce your outgoings then it would be worthwhile speaking to someone to find out what your options are to address the situation.

Ignoring financial red flags is likely to lead to increased debt which over time can cause stress and anxiety and force you into a position that may be out of your control. Talking to someone is an important step in addressing financial red flags and we can help you look at your options. 

You can email us for discreet, free and private support on info@ditchdebtwithdignity.com