Have you ever feared going bankrupt? Or you’ve saved and invested so well that this thought doesn’t bother you at all? Read on to see if you need to worry or not.

We have seen so many celebrities go bankrupt that it’s no longer an alien term for us. Do you think there’s a way to predict a possible bankruptcy? Well, there might not be a definite formula for calculating stuff and deciding whether you should be worried or not, but there sure are some warning signs you need to watch out for. If you see any of these, you need to change a lot of things about the way you save and invest. And in case you don’t save or invest at all, you need to be worried, friend!

As the word suggests, bankruptcy is a situation when you have absolutely no money left in any of your bank accounts (or under your pillow). Now you know why we keep encouraging you to save and invest in the right places, don’t you? To help you further, here’s a list of warning signs you need to watch out for. In case you see any of these, you need to worry! Unless you make some major changes in the way you manage your finances, you might just go bankrupt!

Here are the signs:

  • Savings? What’s that?

No matter how hard you try to build a bank for a bad financial phase, you just can’t seem to save enough. Even before the money comes in, you have a long and extensive list of things to spend it on. You take savings way too lightly and believe in relying only on your Credit Card for a rainy day. It’s important to start planning your money early so that you have enough reserves to rely on for your retirement. Don’t wait for that dream job to turn into reality. Start now! If you’re not sure about where to invest, at least start by opening an RD (Recurring Deposit). Consult a financial expert for more help on the right investment options for you.

  • Missing payments? Who cares!

Not just your Credit Card payments, you can’t seem to make any of the other payments on time either. These include the basics like your electricity bill, telephone bill, etc. Sometimes you do it because you’ve developed this casual attitude towards it and other times, you’re just lazy or broke! Start managing your monthly budget and ensure that you make a note of all transactions. Being more aware of your current financial situation is the only way to predict your financial future. If you don’t have enough money left towards the end of the month, that’s one of the biggest signs that you might be headed towards bankruptcy.

  • Debt debt, everywhere!

You’ve a huge pile of debt to repay and you can’t seem to figure out ways of doing that. This debt could be a loan or some money you borrowed from a friend. Borrowing money from your friends or relatives is okay as long as you keep a track of it. If you let it grow, you’ll end up in a huge pile of debt without even realising it. We’re sure you don’t want to do that. Debts are the basic cause of bankruptcy. Be smart about the money you borrow and keep in mind ways of paying it back.

  • Curtailments and some more curtailments!

Just to get enough money to repay your debts, you often ignore the voice of your heart. No matter how much you love shopping, you just can’t shop because you’ve to use that money for paying people back. You never get a chance to pamper yourself and that gets quite frustrating sometimes. But you know that since you don’t have any other reserves to pay off your debts, you need to compromise on your wishes. Curbing your wishes is good when you have a habit of splurging on useless things that are super expensive; but you should be in a position to pamper yourself, every now and then.

  • Tring, tring! Your phone loves to ring!

Getting too many phone calls is okay as long as you like the person on the other side of the line. But if you keep getting calls from your debt collectors, that’s obviously not a good sign. This is the biggest warning sign that you’re almost about to go bankrupt. Instead of giving them innovative excuses, try looking for a real solution. Speak to a financial expert and let them guide you.

  • Your Credit Card balance is about to hit the roof!

You’ve got your Credit Card balance increased beyond allowable limits, and now you don’t know how to go back! The main reason for this is your careless usage. You keep swiping your card for every minute thing like groceries and that’s precisely what has caused this issue! It’s a bad sign because if you keep using your Credit Card, it just means that you don’t have enough cash handy. Living on credit is not the right thing to do. You need to try and survive without overusing your Credit Card. Once you learn that, you might be able to avoid bankruptcy.

  • Financial emergency! Not once, twice!

If you’ve been struck by a financial emergency more than once, that’s just a small warning before the actual storm. We all go through such an emergency once, but if it’s happened more than once, you need to worry! The primary reason you had to go through the same situation again is that you don’t have an emergency fund. An important part of getting your savings right is developing an emergency fund and keeping it handy for such bad situations. If you’ve been through financial emergencies a couple of times, you really need to watch out! The next financial emergency might not give you a chance to recover; you’ll just go bankrupt. We’re sure you don’t want that, do you?

So? What do these warning signs tell you about your spending habits? Are you safe or headed towards bankruptcy? Whatever the situation, you still have time to recover before the actual catastrophe strikes! Make the most of this time and these warnings. Improve your spending habits and don’t let your casual attitude towards money damage things for you.

This article was written by Shrutika Vaishnavi.

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