Knowing the Signs of Too Much Debt
Almost everyone has some debt of some kind. In general, if your debt is manageable, it’s not necessarily a bad thing to have debt. However, once your debt becomes too large, it becomes a problem. So how much debt is too much? This depends on your situation. There is no set dollar amount that is too much. Some people are fine handling $10,000 of debt or more, while others have difficulty with $1000.
Here are some signs that you could have too much debt. Keep in mind that you don’t have to have all of these signs to have a debt issue. Often, if just one or two of these signs apply to you, it could mean that you have more debt than you can afford to repay.
You Don’t Know How Much Debt You Have
One key sign that you have too much debt is that you don’t actually know how much you owe. This could be because you simply have so many various debts that you’ve lost track, but it could also be because you’ve started ignoring bill statements and calls from creditors since you know you can’t make the payments.
Either way, if you’re not sure how much you owe – or who you owe it to – there’s a good chance that you have more debt than you can handle.
You Can Only Pay the Minimum Balance
If you can only afford to pay the minimum balance on your credit cards, there’s a good chance that you have too much debt. Paying only the minimum might keep your creditors quiet, but it’s also very expensive in the long run. You’ll find yourself paying a lot of money in interest, which will not only cost you more, but will mean that you’ll soon have even more debt to deal with.
You Borrow to Pay Bills
If you’ve used one credit card to pay the bill for another, or borrowed money from family, friends, payday loan companies, or the bank to pay your monthly bills, you likely have too much debt. There are only so many places to borrow money from, and you’ll eventually run out of options. Borrowing money to pay your bills and your debts doesn’t solve your problem. It just prolongs the issue and gets you into more and more trouble with more and more sources.
You Juggle Your Bills
Do you strategically time your bills payments based on when you’ll have money? Do you skip certain payments every so often so that you can make other payments? Do you stall one company and pay a bit late so that you can pay another? If you have to resort to juggling and occasionally skipping payments to make ends meet, there’s a good chance you have too much debt.
You Have No Savings
Savings are important. Not only can saving money help you reach your financial goals, but having savings helps you avoid financial trouble as well. If something came up, such as an unexpected car repair or an emergency trip, would you be able to afford it? Or would you have to borrow more money? If you find yourself unable to save even a small amount of money each month, there’s a good chance that you have too much debt.
You Worry About Your Debt
Does your debt stress you out? Are you losing sleep at night? Do you avoid answering the phone because you fear it might be a creditor or collection agent calling? If you worry about your debt, or if you have stopped opening bills because it stresses you out to see them, you likely have too much debt.
Worrying about debt can be bad for your health. Not only does it make it difficult to sleep (which can lead to accidents and several different health problems) but high stress levels can affect your health and well-being in many different ways. If your debt is causing any of these issues, you have too much of it.
You Hide Your Debt
Do you hide your debt from your loved ones? Have you found yourself stashing bills and credit card statements out of the reach of your spouse or significant other? Do you shop “secretly” and not tell your loved ones how much you are spending? Are you embarrassed or afraid to talk about your debt to those who you otherwise trust? If you hide your debt and your finances from those closest to you, there’s a very good chance that you’re in over your head.
What Can You Do If You Have Too Much Debt?
If you have more debt than you can handle, it’s a good idea to speak with a licensed financial professional and get help.