What's Your Debt Set Point?
Debt set point means the amount of debt you think you can handle
. How you figure that amount out certainly varies from person to person. And let's face it-some people are just prone to exaggerate sizes. Here are some signs that you can watch out for to ensure that you don't exceed your debt set point and blow the lid off your finances.
Does your debt keep you awake at night? If you're fretting in the wee dark hours when the rest of the world is asleep, you need a debt check. Sometimes, it can be a complete relief, when you discover that your debt load is reasonable and quite within your ability to manage it. More likely, though, it means you've overspent, and it's time to start looking at ways to reduce your spending and pay down that credit line.
Do you suffer from impulse control? Are you a see it-buy it kind of person? Odds are, you're in debt trouble, unless your Aunt Jenny left you a pretty juicy trust fund. You may be in financial trouble because you were never taught how to manage finances-especially credit-or maybe your models used credit poorly themselves, and you learned that was just how people lived. Either way, if you just cannot control what or when you buy, it's probably time to do a debt check.
Some experts suggest there's a relationship between the size of our waist lines and our debt load. The bigger we are, the bigger our debt gets. And that makes us depressed-so we buy more, and eat more. That may or may not be the case, but there's little doubt that Canadian debt loads are at all time highs, and Canadians are spending more, and saving less than they ever have in the past. If that's you, it's time to pull a switcheroo between what you save and what you spend-hey, and maybe you'll lose a few pounds, too.
Debt denial plays a big part in exceeding debt set points. If you don't know what you owe, you can't be over your debt capacity, can you? Hmmm . . . are you worrying your nights away about debt? See paragraph two.
Anxiety over money is a pretty normal thing, especially if you're buying your first house, car, or other big money item. It's scary to sign on the dotted line for five, or six figure items, and squint through the fine print. But if you don't grow into your debt load over time (and one year is plenty of time) it may mean you're beyond your debt set point, and then it's time to re-configure your debt load.
by: Molly Wider
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