In the society of today, debt has become a norm and a sort of a staple. Every item you can think of are given through loans which include homes to cars, to laundry machines and TVs. Add to item-specific loans the massive amounts of credit card debt we carry as a collective, the numbers are staggering. Many people are not in full possession of so many properties. As much as many people get in to debt, at what point can we say a person’s debt is no longer okay?
- Are you having trouble making minimum payments?
If you find yourself struggling to make your minimum payments regularly for your debt, then you are no longer in control. It means your debt is over your head and your debt has become a huge problem.
- Does your total debt increases each month despite making payments?
If your debt is running in the opposite direction to pay off, there is an issue. Are you taking out new credit cards or loans? Are you making minimum payments that don’t even cover the interest accrued? These are signs that you are spending above your means (or more than you make.) While this habit can be sustained for certain lengths of time, the payments and resulting debt will catch up with you. When the payments and totals catch up, where will you be?
- Do you have irregular income that fluctuates and doesn’t allow you to make regular payments?
A borrower can be eaten alive by late fees and penalties. Beware of late fees and penalties if you do not have the means to make regular payments.
- Can you not keep track of all the payments you need to make?
This could be a sign of you losing control over your debt if the numbers of loans and credit you have out have created so many payments you find difficult to keep up with.
- Most important of all, regardless of the amount of debt you carry, do you feel overwhelmed, uncomfortable or stressed by your finances?
There is a need for you to take heed of your intuition and your gut telling you that there is a problem. These internal calls should never be ignored. If it doesn’t work for you, it doesn’t work for you; it does not matter if your friends and family have more debt than you and your situation seems fine.
If you feel like you might have a debt problem, you need to decide what place debt has in your life. Are you comfortable carrying the debt or would you feel more at ease without the extra weight? What amount of debt are you comfortable with and is it in your best interest? If you decide to pay off any amount of your debt, you will need to start with a plan. List out all your debts from smallest to largest and start throwing any extra money you come across at this debt.
You will start applying for that payment amount once the smallest debt is paid off. Any extra cash you come up with will also be directed towards the debt. This method is called the debt snowball and it has been working for a lot of people. It’s all good if it doesn’t work for you. Make research and find any method that works for you best. You will start working towards finding the cash to square these debts away once and for all by following a budget, selling things you don’t need and living below your means.
Whatever path you choose, create a plan and a budget- then stick To It. Keep your goals and intentions front and center and learn to be content and grateful for the things you have while you climb your way out of the hole. Your future self will thank you,