/ 25 May 2011

How to tell if you are facing a financial crisis

If you recognise any of the signs below in your own life, it’s time to face the harsh truth that your lifestyle, financial security and future well-being are at serious risk. If you have any dependents, so is theirs.

This is the toughest part, but it’s the single most important step in the process of turning the tides and eliminating this grave threat. It also happens to be the most liberating part of the process too, because once you can admit to yourself that there is a problem that needs your urgent attention, you can stop worrying about it and start doing something about it because that’s the only way you’re going to rebuild your financial security.

The top 10 tell-tale signs of imminent financial disaster or distress:

To get out of the downward spiral one needs to start by following the advice of a famous proverb of unknown origins: When you find yourself in a hole, stop digging. It’s that simple. The process starts by stopping whatever you were doing that got you into the hole in the first place.

Don’t be tempted to blame external forces beyond your control for your situation because that will simply disempower and immobilise you. Yes, external forces and events can appear to be the cause, but the truth is that it’s our lack of preparation for these events that ultimately places us at its mercy.

Over 60% of South Africans across all income brackets are either in financial distress or facing financial disaster and 98% depend on their monthly income to get by each month. That means that more than half the people you work with walk past in the street, or see in the queue at the movies are silently suffering at the hands of their financial worries.

Don’t allow yourself or your loved ones to become another statistic of this alarming trend because you failed to recognise or acknowledge the warning signs in time to avert disaster. It’s a very unpleasant experience that is easily avoided when empowered with self awareness, foresight and a dose of courage.

Gary Wilde is chief executive of Wilde Insights.

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