There was a link on Yahoo to an article that pointed out five of the danger signs that financial instability might be in the future of a person or family. The link to that article is Five Danger Signs that may signal financial disaster may be on the horizon.
HAVING TOO MANY CREDIT CARDS WITH LIMITS HIGHER THAN CAN BE PAID OFF MONTHLY is an indicator that a person is digging a hole for themselves. Also it affects your credit score dramatically with a large number of different credit cards are approved for you and your spouse. The credit rating services take into consideration that the person could charge the maximum on each card which dramatically affect their ability to pay other debts. Also if the person is paying interest on the cards it is usually at a very high rate as high as 13% up to over 30%.
BEWARE OF ZERO INTEREST CREDIT OFFERS FOR UP TO A YEAR OR SOMETIMES EVEN LONGER. There are transaction fees associated with transferring balances from other cards or from writing checks that are charged to the credit card to pay bills. The transaction fee may be anywhere from 3% to 10% of the total amount paid using the zero interest credit card offer. Also you must be sure to pay the credit card on time monthly. A delinquent payment after the specified payment date will cause the card to revert to normal interest rates usually going back to the inception date of the amount borrowed.
FINANCIAL EMERGENCIES MAY NECESSITATE BORROWING MORE MONEY THAN YOU PROJECTED IN YOUR FAMILY BUDGET. If it is necessary to borrow a larger amount than your monthly budget can handle. Determine the amount you can pay back on the necessary amount monthly. It might be wise to go to the bank or credit union and request a loan to pay this debt. The interest rate will almost always be significantly less than the credit card rates. A signature loan is preferable. If it is necessary to offer collateral for the loan, than possibly another alternative needs to be investigated. Possibly an emergency loan from a retirement fund or insurance policy if those options are available in your case. Many times only medical emergencies are a reason to borrow from a retirement fund or insurance policy. An exception is if an insurance policy permits sometimes it might be advantageous to borrow to help with the down payment on the purchase of a home.
THE MAIN ADVICE IS TO USE GOOD JUDGEMENT AND DO NOT PANIC IF AN EMERGENCY OCCURS. A SOUND PLAN HAS PULLED A LOT OF FAMILIES OUT OF UNEXPECTED EMERGENCIES. PEOPLE MAY HAVE A TEMPORARY LAPSE IN GOOD JUDGEMENT AND NEED TO ADJUST THEIR BUDGET TO COMPENSATE FOR THIS ADVENT.