Whether it’s student loan or credit card debt, balances that are too high can create major financial problems. To determine if you are carrying too much debt, be on the lookout for these signs:
Sign No. 1 – You have no savings
Savings is a major part of financial success, and if you have no money stashed away for emergency situations or unexpected expenses, it could be a sign that you have too much debt. When you have a lot of debt, all of your extra money typically goes toward your monthly payments instead of savings. Should you find that your debts are keeping you from setting money aside, it might be time to sit down with a credit counseling agency to come up with a plan to rid yourself of debt.
Sign No. 2 – You are forced to pay your bills late
When you take on any kind of debt, it is strongly recommended that you always pay on time to help build, and not hurt, your credit score. However, consumers who carry too much debt often find themselves paying late because they simply have no money. Should this be the case, you may want to take some extra time to look over your expenses when you are budgeting for the month to see if there are any areas you can cut back to have more money to put toward your balances.
Sign No. 3 – You can only afford minimum payments
While making minimum payments is better than not paying at all, it still isn’t the recommended course of action when attempting to tackle your debt. However, you might only be able to afford minimum payments, which could be a sign that you are carrying too much debt. To help solve this issue, you may want to consider contacting your creditor to see if they are able to reduce your interest rates so making minimum payments won’t hurt as much.
Sign No. 4 – You borrow money to make monthly payments
As soon as you begin to borrow money from friends or family members to help cover your monthly payments you should know that you have way too much debt. At this point, you need to begin thinking about potential strategies to help pay down your balances, such as consolidation.