How To Determine If You Have A Serious Debt Problem

How much debt do you think is too much? A couple of hundred dollars? Several thousand dollars or maybe you will consider it as a 'serious problem' when it already amounts to hundred thousand dollars? I once read that people who are in serious debt problem often panic and move too fast to solve a problem that has been with them for years. They act fast that they are already paying wrong kinds of debts. Sometimes, paying the lowest amount of debt thinking that it will eliminate your debt problem faster is not always the best thing to do. [panel-image src="http://moneygizmo.net/wp-content/uploads/2013/01/debt-problems-how-to-recover.jpg" caption="Are you having some serious debt problems?"] Here are the top signs that would indicate when you are already in a serious debt problem. [impt text="1. Paying minimum every month."] First on the list is when you are only paying the minimum amount on your debts. One good example is credit card debts. The minimum is very low it only requires you to pay 5-10% of the total credit card bill. Problem is that the remaining unpaid will incur high interest and will only take short amount of time before you drown in debt.[divider] [impt text="2. Juggling payments."] When you are already juggling payment from one bill to another, you debt is already a serious problem. Juggling happens when you pay one debt with the available balance from another and the cycle repeats.[divider] [impt text="3. Charging things to credit what you used to pay in cash."] Remember the things you used to pay in cash such as the groceries? Well, if you are already using your credit card to buy those things, you are in serious debt problem. It just means that the money you are suppose to use on those items are already used in paying debts.[divider] [impt text="4. Unable to save every month."] Saving should be done at least every month but if you cant at least save 5% of your monthly income, then you must be in so much debt already.[divider] [impt text="5. You don’t know how much you owe."] Serious debt problem often causes panic and stress. Because of these factors, you can actually forget how much debt remains and sometimes resort to adding more bad debts.[divider] [impt text="6. Charging more each month than what you can pay."] A serious problem in debt sometimes goes out of control. Instead of minimizing expenses and cost-cutting your budget, you sometimes spend more now than what you really earn. It happens especially when you have more than 3 credit cards with limits that are bigger than your monthly income.[divider] [impt text="7. No more money before payday."] Bouncing checks. Another sign that would raise the red flag is when your money becomes zero days or even weeks before payday. And since you dont have money to pay some of your expenses, you pay with checks not knowing that it will only bounce.[divider] [impt text="8. Takes longer to pay off debts."] If the earlier signs already happened to you and you still did not take action to eliminate it fast, then you will be aware of this last sign. You will realize that your debts wont disappear and only becomes higher and higher due to interest. The worst case is when you will be paying debts for the rest of your life.[divider] Having debts is quite normal in people's lives for as long as it is small, controllable and spent to create more money such as loans. However, there are bad debts such as credit card debts that would bring you to a serious debt problem. The key here is to quickly identify which of the signs you are already experiencing so you can act fast in eliminating your debt problem.

Mark Hugh Neri

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