How Much Debt is Too Much?

Debt is rampant these days and it’s not that often that you hear of people who are completely debt-free. Many people have a credit card that they take out every so often, are currently still paying the mortgage on their home, or are still paying down their student loans. These are all different types of debt and they may be necessary types of debt; having some debt can even be good in some cases. But when does debt become too much? Here are five signs that could be your own red flags to let you know that you’re accumulating too much debt.
You Have Less Disposable Income Every Month
If you find that you’re bringing home the same amount every month, but somehow have less and less to spend, this means that money is going towards your debt, and it’s one of the first signs that you’re going too far into debt.
You Have No Savings
If you don’t have anything saved up for a rainy day, or that six-month emergency when you get laid off, it means that you’ve either used it to pay off your current debt or to buy things that you can’t afford. If you don’t have anything socked away, it’s time to look at where your money is going, and figure out a way to not only keep more of it, but start paying off your debt at the same time.
You Go Into Debt to Pay Off More Debt
You use a credit card to pay off another credit card. Or you take out a cash advance to pay down the bills that have been accumulating for the past two months. Or you take out a personal loan to pay off all your credit card bills. Going further into debt to pay off your current debt rarely makes sense, so be very careful if you’re considering this as an option for your debt problems. A professional lender or broker can help you with a debt consolidation loan, which isn’t really a new loan to help you pay off debt but rather, one loan that covers only your existing debt. With this type of loan, you’re just moving your debt, you’re not actually going further into debt.
You Don’t Know How Much Debt You Have
You need to know how much debt you have, so that you know how much you have to pay off. If you don’t have a hard figure in place, this means that you’ve accumulated so much debt that you’ve simply lost track of it. This is extremely dangerous, and one of the biggest signs that you’re accumulating too much debt too quickly.
It’s Affecting Your Health
Stress is a huge factor in your overall health, and there’s no reason to let a thing like money keep you up at night. If you find that you’re losing sleep over your bills, have lost your usual appetite, are developing constant headaches, or have a general lack of focus because you can’t stop thinking and worrying about your bills, it’s time to get help. Find someone who can help you work through your debt problems, so you can get back to your life again.