How Do I Know If I Have A Debt Problem?
Nowadays, most people have some form of debt, whether it is a mortgage
, a credit card, a loan or an overdraft. But the big question is, when does your debt become a problem?
If you find balancing your monthly outgoings a struggle, or you have more money going out than coming in, your debts may have become a problem.
The first step is admitting your debts have become an issue and facing up to the fact that you need to tackle the problem. This is the hardest part of talking control over your finances, but by far the best decision you will ever make. Now is the time to take action, because the longer you wait, the worse the problem will become. Here are some points to consider when deciding whether you have a problem that needs addressing.
- You only ever pay the minimum amount on your credit cards
Minimum repayments offers may look attractive, but they are specifically designed so that you pay off the debt for longer, and end up paying more in interest. You should always pay as much as you can afford.
- You're borrowing more to pay off your debts
Borrowing more money to pay off existing debts is very dangerous. The more money you borrow, the easier it seems to be to manage your finances, but it is easy to forget that you will need to pay the money back in future and this could lead to extreme difficulty and even bankruptcy.
- You use your credit card to pay for everyday items
If you use your credit card to pay for food or utilities, you need to cut back and put a budget plan in place. Constant spending on credit cards results in huge amounts of interest being accrued that you will struggle to pay off for years if you cannot clear the full balance on your credit cards each month.
- You find it hard to talk about your situation
If you are embarrassed about your debts, to the point where you find yourself lying to friends and family about how much you earn, spend or how much debt you have, this indicates a denial problem. This can escalate to the point where you are too afraid to read your own bill statements or are afraid to answer the telephone. You must take action now before the situation becomes out of control.
- You have been rejected for credit
This is likely to be because you have damaged your credit rating. This can happen by making payments late, missing payments or you may be rejected because you have too much outstanding credit. If you already have credit cards or loans, or even owe money to a few catalogues, it is wise not to seek out more credit, unless you know you can pay it back.
- You are constantly worried about your finances
New research by talkaboutdebt has revealed that 61% of people in serious debt have seen their health affected by their worries, and 29% have taken up to six months off work due to stress caused by debt. If your finances ever affect your health, your happiness or your career, you need to seek help immediately.
by: Katie Simpson
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