10 Signs you need a financial makeover

Jul 6, 2010 at 5:10 a.m. ET

Whether due to a lack of education or a lack of money, many of us have given up on the idea of proactively managing money. Fortunately, you can turn your financial fate around, but the first step is acknowledging that you need help. Here are some clear-cut signs that a money makeover should be in your near future.

Couple going over finances

1You can find money to by a purse or a pair of shoes but not to save or invest regularly.

Are you sacrificing your future for a new pair of shoes? "Set up an auto draft to fund your financial goals -- retirement, education, home purchase -- and use any excess income to fund your rewards," suggests Julie Asti of Asti Financial Management in Berkeley, California.

2You don't know how much you spend on variable expenses each month.

"People think of a budget as a four-letter word," says Asti. "But before you can make any changes or move your financial situation forward, you need to understand where your money goes each month."

3Your bank account is three digits or less.

Would a major expense, such as a car repair, knock out your bank account? "Having less than $1000 in your bank account means that you are not living close to the edge -- you are on the edge," says Asti.

4you're Lying about or hiding your purchases.

Are you hiding shopping bags? Kathleen Burns Kingsbury of KBK Wealth Connection in Easton, Massachusetts, is a wealth psychology expert and the author of Creating Wealth from the Inside Out. "Retail therapy may feel good in the moment, but the resulting shame and embarrassment indicates it is time for a financial makeover," she says.

5You have no retirement savings and are older than 35.

Do you put everyone's financial needs ahead of your own? "Many women answer 'yes' to this question," says Kingsbury. "For every dollar you give to others, match it with a dollar investment in your golden years."

Up next: 5 More signs you need a financial makeover >>

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