What may be too much of a financial burden for you, may be completely manageable for someone else. Every situation is different. Taking control of your debt involves acknowledging the problems you have. Our Self Assessment Survey may be used to help you figure out if you need help restructuring your debts, adjusting your budget or contacting a trustee in bankruptcy. The sooner you recognize the tell-tale signs, the sooner you can take steps to modify your spending.
All Your Money Goes Toward Debt
In a near-perfect world, debt payments should not exceed 36% of your gross monthly income. But if you’re spending 50% or more on debt payments each month, it’s time to make some financial adjustments.
Minimum Payments
If you can barely afford the minimum payment on your credit cards, you’re likely carrying too much debt. Period.
Physical Side Effects
The stress of not being able to keep up with payments can affect your sleep routine, happiness, appetite, and anxiety level. If you’re constantly thinking about your debt – or being reminded of your debt with collection calls – you’re probably carrying too much.
Denied Credit
The amount of debt you owe affects your credit score. The more debt you carry, the harder it is to get new credit. Your streak of credit approvals can quickly come to an end as lenders and creditors review your applications and decide that you’re overextended.
Creditors and lenders send rejection letters after turning down credit applications, and these letters often explain the reasons behind a rejection. Common reasons include a low credit score, no credit history, high balances, and, sometimes, too much credit.
No Savings
A comfortable nest egg is a sign of good personal finance management. This provides income after a job loss and cash for other emergencies. However, if you’re spending all your money on debt payments, there’s probably little left for savings.
Late Bill Payments
When you’re carrying too much debt, it can be hard to keep up with your monthly payments. You can forget about creditors and due dates altogether, or send late payments. Owing too much can hurt your credit score, and if you begin sending late payments, your score takes another major hit.
Don’t wait until your life is clouded by all six of these warning signs. If you are struggling financially, we can help. Contact us for a free, no-obligation consultation.
