What Is a Financial Problem?

Managing finances requires some organizational, prioritization and discipline-related skills. Deficiencies can cause financial problems with long-lasting effects. Because financial problems tend to be interrelated, allowing one financial problem to fester and become more serious can create a domino effect that contributes to additional financial problems. In general, a financial problem is an event, habit or situation that threatens the stability of a person's or a business' financial well-being. Examining different types of financial problems can help you take preventative measures in order to avoid them.

Insufficient Income

A financial problem can relate to insufficient income. Consumers rely on income to pay bills, including rent or mortgage payments, purchase groceries and other needed goods, fund retirement goals and provide for adequate insurance needs. As families grow or lifestyle preferences become more complex, insufficient income can create financial problems if consumers can't afford the things they need or want. Consumers may have to forgo desired treats or risk going without recommended items, such as health insurance, in order to get by. Otherwise, insufficient income can lead to another financial problem -- debt.

Debt

Many consumers and businesses carry some type of debt, whether it's a home mortgage, credit line, student loans or credit card debt. Some debt can be a good thing; taking out loans to pay for investments such as a college education or family home can help consumers provide for their futures. Business loans can help companies grow and expand, generating more revenues in the long run thanks to short-term debt. But too much debt can be a serious financial problem leading to bankruptcy and the loss of goods, including homes or businesses. Debt becomes a cyclical financial problem because consumers must pay interest on their obligations, deepening their overall financial responsibility.

Organization

Another type of financial problem relates to organization. Maintaining finances requires a certain amount of organization in order to make payments on time, track cash flow and, for businesses, meet government regulations. Missed payments can result in lowered credit scores, making it more difficult to secure loans, apartments or jobs in the future. Delinquent accounts can be turned over to collection agencies, negatively impacting your credit history. Incorrectly reported income, wages, revenues or losses to the government might result in penalties or audits. Continually overdrawing bank accounts can result in overdraft fees, bounced check fines and diminished reputation with clients, vendors and business associates.

Disputes

A financial problem can be rooted in interpersonal differences. Married couples may have different attitudes toward spending, saving, paying down debt and household budgeting, resulting in inconsistent financial strategies. Business partners may also hold fundamentally different attitudes toward finances. This can result not only in emotional discord and duress, but financial problems related to debt and budgeting.