Debt can be a serious burden when you know you are already deep down in it. But there are some individuals and families who do not realize how close they are to crossing the line. Some of the more obvious signals of debt include not enough income to pay all the bills in a month or debt collection calls coming in at all times of the day.
While many red flags of debt are pretty plain to see, there are other signs that could indicate you are close to being in some serious trouble. Here are some of the symptoms of imminent debt problems you need to keep your eye on and how to help yourself out of a hole:
Clueless About Your Debt Balances
You might have an idea of how much you are required to pay on bills each month but if you have no idea how you owe in total with your debts, you may be headed for disaster. The best thing to do right away is gather the most recent copies of your billing statements for all of your installment accounts and write down what you owe in total on your mortgage, your credit cards, and other personal or student loans. The total may be in the thousands or hundreds of thousands which is the total amount of debt you carry around. Consider revising your budget to dedicate more cash each month towards these debts and eliminate them in a faster period of time.
Charging For Purchase that Were Once Cash-Only
You might dismiss the fact that you are buying milk and bread with your Visa card as a way to save the cash you carry on hand or to increase your rewards points. However, if you literally do not have the $6 or whatever it takes for basic needs like groceries to back up your credit card purchases, you essentially can not afford these purchases. Ideally, whatever you spend on credit, you should have the cash equivalent in the bank to ensure full balance payoff at the end of the month. If you are not able to do that, you need to start cutting out expenses so you can free up some more cash. Keep spending on credit and you’ll end up buried in very expensive debt that costs you even more money.
Robbing Paul to Pay the Light Bill
If you are constantly rotating money around to different accounts in order to meet your monthly bill obligations, you are facing some difficult financial times ahead. At some point all the switching of money will catch up with you and one day you’ll realize you have nothing left. When you take cash away from one obligation to pay off another, you are only hurting yourself. When you get to a point of having nothing left to pay out, you can end up ruining your credit and be responsible for multiple finance charges, late fees, and penalties.
Ignoring Billing Statements
If you tend to let all your bills sit in a pile of unopened mail, not only are you adding to the clutter of your home, you are likely missing or ignoring important deadlines and other information. Many times, paperwork is left unattended to simply because the account holder has no clear idea of how bills are going to get paid. Rather than dealing with the situation head on, they let billing statements sit and then become completely overwhelmed with high balances and debt collections calls.
Excuses Made for Non-Payment of Bills
You may have your sites set on that new furniture set or some other must-have item that has finally gone on sale. Consider how you react when you know you have bills to pay but the impulse to buy is too strong. You may do a mental evaluation of how you can have both the item you want and eventually pay the bills you owe. If you are focusing your thoughts solely on what you don’t have or want you want instead of meeting your financial obligations, you are establishing a bad habit pattern of ignoring your debts and making excuses for your behavior. If you have established a reasonable budget, you should know and accept well in advance what you can afford and when, ensuring first that all of your financial obligations have been met.