Thursday, August 23, 2007 post on 7 Signs that your in deep debt trouble

This is the second post I have decided to feature from her blog is by far becoming one of my favorites out there. You can find the first post I decided to feature from on microsavings Post that caught my attention. This one I decided to list the full article here with her permission of course. Read and enjoy.

I have to give you a preemptive warning. This is not a fun read for those that may have an issue with growing debt but a necessary one. If you have debt sometimes its easier to sweep things under the rug instead of address them head on especially when things seem to be spiraling out of control.

1. You are spending more than you earn

If you are spending more each month than you earn then you need to seriously start taking control over your finances. This is not to say that you are necessarily being frivolous with your money but desperate times call for desperate actions so tighten your belt and get your expenses back under your take home pay.

2. You have maxed out all the plastic in your wallet

This is a sign of a looming debt disaster. The average America will carry between 5-10 credit cards in their wallet. Carrying that much credit around with me alone would send shivers up my spine but then maxing them out. If you are in the situation where you have maxed out your cards you need to go into debt reduction mode ASAP.

3. You really don’t know how much you owe and have very little desire to find out

This is a very bad place to be. Typically it means you are in denial and it is very hard to break out of that. You need to just realize that is not getting any better without taking some action and dig into your finances and find out what’s going on. I’d equate to ripping that band-aid off. Hurts like hell to do it but once its done it feels so much better.

4. You are beginning to receive notices about delinquent payments

This is not good. You need to act fast to get your payments made and then once again take a long hard look at your financial makeup and figure out where to go from here.

5. You get a sigh of relief after being approved for another credit card

You should never be relieved that you just got approved for another credit card. On the contrary, you should have that sinking feeling that something is not right. If you are feeling relieved about this it most likely means that you are strapped financially and serious debt problems are on the horizon.

6. You are paying down one credit card with another

This is another very bad sign that you have over extended your credit and need to get it paid down quickly. Eventually this tactic can lead to some serious issues and can/will snowball out of control before you know it. You need to stop paying off one credit card with the other and get your finances strapped down so you can start paying down the credit altogether.

7. Your credit cards are no longer being used for convenience or rewards but because you are short on money

Another gut check time. If you are at this point you need to start looking into some serious financial help for cutting expenses. Using credit cards to sustain your necessities is the cusp of a growing debt problem that is sure to only get worse if left unchecked.

Like I said, debt is not one of the more pleasureable subjects related to personal finance but the fact of the matter is that the majority of Americans today carry a substantial amount of debt. We need to be actively reducing this and the only way to do that is to admit that it is a problem. If you need some added motivation you should definitely check out the post, 20 great things about being debt free.

Got any other signs that we missed? Do share.

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