Financial denial is one of the most common ways to deal with financial problems. Many people do not like thinking about their financial difficulties, whether this is debt or problematic cash flow. Looking at how financial denial works and ways to escape denial may help you take control of your finances. However, if your financial dilemma is related to bankruptcy, then consider asking a Chattanooga bankruptcy lawyer for guidance.
Effects of Financial Denial
Many college students and people who are moving out for the first time face a period of financial denial. When money problems start adding up, the first reaction for many people is to ignore the problems. Denial is easier to face than debt, large payments, and losing money.
This is where financial denial kicks in for many people. Financial denial can happen in the early stages of life but can also happen at any stage of life that involves money problems. What denial can lead to is not solving money problems, avoiding budgets, not paying off debt, and making unwise financial decisions.
As a result, ignoring money problems often leads to more money problems. This means more debt, fewer savings, and a greater risk of serious financial dilemmas. Over time, the psychological effects of debt build up and become overwhelming. Stress, anxiety, depression, and anger are common ways of dealing with financial issues.
Hopelessness about whether the debt will ever be escapable can make long-term depression sit in. Once this happens, financial denial may grow stronger, resulting in more problems later on. Others may respond to these issues by worrying about the future, which leads to anxiety. Those who feel stress are usually focused on the present moment money problems.
Either of these scenarios leads to the same main issue, not taking action. There are multiple steps that can be taken to escape financial denial and financial problems. Recognizing the red flags of financial problems is the first step.
Use These Red Flags to Escape Denial
The most common red flags of financial problems are financial denial, minimum payments, large monthly payments, depending on cash advances, refinancing, declined loans or cards, and not building savings. If someone asks you about your finances and you avoid the conversation, this could be a red flag by itself.
Making minimum payments usually means there is not enough money coming in. Large monthly payments can create financial barriers for almost anyone. Depending on alternate ways to make payments is a bigger sign of having too much debt with not enough money to pay the debt.
What this ultimately leads to is declined credit cards and lower savings. When your savings starts shrinking but you are unsure why, then now is the time to take action. Assess your financial situation and explore budgeting options.
Contact Tom Bible Law for Legal Help
Facing bankruptcy is not easy. All you have to do is call us at Tom Bible Law today at (423) 424-3116 for a consultation about your financial dilemma. Our dedicated team of Tennessee bankruptcy attorneys is ready to help you assess your options for bankruptcy given your financial circumstances. We serve clients throughout the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.