Savingexplained.com post on 7 Signs that your in deep debt trouble

This is the second post I have decided to feature from Savingexplained.com her blog is by far becoming one of my favorites out there. You can find the first post I decided to feature from Savingexplained.com 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.

New Job

So if you've been following my blog at all you would have read about the trials and tribulations of being interviewed for a new job. It all started when I was turned down due to my credit then follow that up with the second interview but after that I was still left wondering as the DM said he would let me know last Thursday or Friday. On Monday I still didn't recieve word so I gave him a call and got his voice mail, later Monday night still no call back things are not looking good at this point.

Then mid-afternoon of Tuesday my voice mail receives a call from the DM stating that they have been backlogged and will be making a decision by Wednesday mid-afternoon. Come Wednesday later afternoon my wife calls no call, within 15 minutes later calls back with important information pertain to the DM has called and wanted me to call back. Finally I'm thinking, I give the call back and the offer is placed on the table after some negotiating early this morning my wife receives a call from their head office that the offer is in my email. Glad to report that after all this I will be moving on to a new job much closer to home.

Car Debate

Here's a question I've asked the community at NetworthIQ.com that I've received some pretty good feedback on and was wondering if anyone here had anymore insight into it.

Question

Here's the situation I'm currently dealing with a truck that I still owe $7700 at 24% interest. It's killing me in gas consumption, do I look at something more efficient considering my commute to work is 80 clicks round trip (approx. 50 miles)? Unfortunately my credit score is still a bleak 603 so I'm not going to get a better rate than 24% but then I would be refinancing the $7700 plus the cost of another car! Considering what I hear people get as a trade in it won't change the situation much. Also currently I do have another interview for a place closer to home so my gas consumption wouldn't be half of what it is if I would get this job. So the question is do I keep the truck or look at something more economical?
Posted by workingcanuck

Answers

I would sell the truck, and buy a car/truck that you can pay for with cash. Owing any money on a car/truck is against my financial approach. I'd rather pay cash for a modest used car and be debt free. Its tough at first, but over time, if you pay yourself what would have been your car payment -- in a few years you can move up to a nicer vehicle.

For 10 years, my secretary at work had a nicer, newer car while making less than 1/3 what I make. But, two years ago I bought a really clean, used BMW. And I paid cash.

Just my two cents.
Posted by: onavacationfaraway 8/5/2007 9:41:56 PM

How much is the truck worth?

If it is worth over $8000, sell it and buy some used with decent gas mileage. Up grade when you can afford it.

You might also consider car pooling if possible. My neighbor does it and it saves him a ton.
Posted by: Ksachef 8/7/2007 11:05:20 AM

Why not sell the car, pay down the debt, and get a used one with better gas mileage that's cheaper?
Posted by: rubyeeyz 8/7/2007 11:12:31 AM

Excuse my ignorance here as this is the first car I ever financed, but wouldn't there be a lien against the car from the finance company preventing me from selling it without paying them out first? I've always drove beater cars in the past loved them due to the low cost and amount of time I got out of them but when the last one went down the families thoughts were due to my commute I would be much better off getting something more reliable.
Posted by: workingcanuck 8/8/2007 8:28:00 AM

I should also note the blue book on the truck is about $6000 although I think I would be lucky if I could pull $5000 out of it due to 248,000 kilometers. Leaving a significant outstanding balance against the loan.

Also thank you for the comments so far.
Posted by: workingcanuck 8/8/2007 8:31:21 AM

So what's your thoughts on this?

Update to Credit Score Post

I'm glad to report apparently qualifications still do matter when searching for a job. I received a call from the company DM that he would like to have a second interview today at 2. When I told him that the other manager said they wouldn't be proceeding due to my credit he responded that would not be the case and that he still wanted to meet with me. I'll let you all know how it goes, wish me luck!

1st Post Credit Checks

Credit checks

So here’s the deal I applied for another job closer to home and they required a background and credit check. Guess what my credit check caused me to lose the job! What’s scary about this is more and more companies are starting to implement this process in their hiring decisions. At that point I went over to the Equifax website and pulled my credit report, nothing was unfortunately out of whack I found what I expected to find a score of 603 which stops me from obtaining any credit (not that I’m looking for any right now) and unfortunately a majority of jobs. I have about another 3 years to go before the negatives will begin falling off the report. I have no one to blame but myself, but at the same time I feel like the world in crashing in on me. Another reason to keep your financial house in order.