Early Warning Signs You Have Too Much Debt

Most of us carry some amount of debt every day. Having debt isn't necessarily a problem in and of itself. The issue is when you have more debt than you can comfortably manage. 

Knowing when your debt's about to become a problem isn't very easy. Small struggles may feel like a normal part of the process. But if you can tell that your debt's getting out of hand – before it actually gets out of hand – you'll have a much easier time making the necessary adjustments.  

Here are a few warning signs that may be telling you that your debt is about to be more than you can handle: 

You have no savings 

If your debt obligations are preventing you from building your savings, that's a major problem. If you're dipping into your existing savings to stay current with your debt obligations, that's an even bigger problem.

There's a clear relationship between debt and savings. If you can manage your debts, while building your savings, you're probably in okay shape. If your debts are adversely impacting your ability to maintain a healthy savings fund, you may want to look into reducing your debts.

Your bills are stressing you out 

Does opening the mailbox fill you with dread? Are you wondering what will be there today that you’ll need to pay for?

If your bills are causing a strong emotional response, like anger or fear, that's a strong sign that your finances may be headed for trouble. And even if your finances are relatively strong, who wants to carry around all that stress? 

Listen to your gut. If you're worried about finances that's enough of a reason to seek help immediately.

Money is always on your mind 

While we all have days of worrying about an upcoming expense, but if your thoughts are consumed with worry about your debts on a daily basis, that's not really normal or acceptable. If your debt looms over every little decision and expense, that's another indicator that your debt is becoming a problem. 

You're hiding purchases 

Most of us are guilty of hiding a purchase from someone because we don’t want them to know we bought a new pair of shoes or something else we really didn’t need, but if this is a habit, something’s wrong.

Do you hide your non-essential purchases on a regular basis? If so, that may be because subconsciously you feel like something is wrong and you can't really afford these purchases. If you're feeling guilty about spending even though you can technically afford what you're buying, that's worth examining. There's a good chance that there's a growing financial issue at the center of that guilt.  

You're only making the minimum payments 

With most debts, the key is to make payments above the minimum. Only paying the minimum will often cost you significantly in the long run as the debt drags out and you end up paying more and more in interest charges.

If you can only make the minimum payment on your credit card bills or loans, that might indicate that there's a problem.  

You use one debt to pay another

It’s one thing to pay your utility bills with your credit cards to earn points, but if you’re doing it because you don’t have the cash to pay them, that’s a problem.

Shuffling debts around is a very common sign that your finances may be in trouble. This juggling may solve short-term problems, but in the long-term you often end up with more debt and no real progress.  

Your card is declined

If your credit or debit card is declined when you try to make a small purchase, there's a good chance that you're heading for trouble (or already there). This is a big red flag that more financial trouble is coming because it only gets worse from here. Once you’ve drained your accounts and maxed out your cards, how will you pay your bills and buy groceries? 

If you can relate to any of these early warning signs that you’re carrying too much debt, it’s time to get a handle on your debt. Consider working with a debt and budget counselor to discuss options. Counseling is available for free 24/7, online and over the phone.