What money smells do you need to work on?

I do software development at work.  A term that gets thrown around a bit is code smell.  It's a catch-all for any number of programming practices that indicate more serious underlying problems, or that indicate that quick fixes were made that will be more costly to maintain down the road.

Basically, the code smells a little bit.  There's nothing really wrong with it, but it's getting close to its “best if used by” date or it's past it a bit.  You want to incorporate lessons learned sooner rather than later to get the smell out.

Personal finance is the same way.  There are money smells that indicate that, although there's probably nothing really wrong yet with your finances, your personal finance situation is turning a bit and can get rank further down the road.  Liz Weston's article, 8 signs you're headed for financial disaster, calls out a few of these money smells:

• Surprises on your bank account statements. You have some of those extra fees for overdrawing your account in some way, and didn't expect them.
• Lack of savings. This indicates that you're tapped out and could easily go into the red.
• Lack of discretionary income. This indicates that your breathing room is gone, and that you could easily go into the red.
• You've taken out a payday loan. These are typically viewed as loans of last resort, as they carry very high interest.  This indicates that other funding sources have dried up.

There are others on Ms. Weston's list, but they're more indications that things not only smell bad with your finance, they're downright spoiled.  Missed loan payments, for example, indicate that serious problems have already arrived.

I'd suggest a few more early-warning type indicators:

• You start to ask, “When does the next paycheck come in?” Maybe this one only has a hint of malodor to it, but if there were always three or four paychecks' worth in the checking account, it would hardly ever matter when the next one came in.  As it is, if this question is being asked, it means that it's a concern.  There still may be time to shuffle money around from one account to another in order to cover a credit card bill (that still may be paid in full) and the problem is averted.  But it's still far better to have a lot of cushion in the checking account, not just a small one.
• You start to second-guess yourself about when payments have come out. Related to the above one, earlier this week I had to call up my wife to see if our credit card payment had been taken out of our account.  I knew that it was getting close, and I knew that my next paycheck wouldn't be deposited until now, so I feared (for a few minutes, anyway) that I had dropped the ball.  What triggered this brief feeling of low-grade dread was seeing my balance on an ATM slip.  It was easily high enough not to bounce anything, but not if my credit card payment hadn't been taken out already.
• You pull out a fair bit of money from business accounts to fund current personal expenses. If business profits are used to cover current personal expenses rather than grow the business, then this is a money smell because it shows that present demands are cutting into future-oriented pursuits.

We're embarking on a typically spend-happy few weeks, and things can get really busy.  Please take time to smell your finances!

Any other money smells I've overlooked?

Thanks to A Gai Shan Life for including this post in the Carnival of Personal Finance.