You’re using one credit card to pay off another credit card debt. You can’t afford to make minimum payments. All of these problems stem from one key issue: you’re in debt over your head.
If you’ve managed to keep your creditors at bay and scrape by with your monthly payments, however, it can be easy to justify your debt. Instead of waiting for the numbers in your bank account to go negative, watch out for these warning signs that indicate impending financial crisis.
You Have No Idea How Much is In the Bank
The moment you realize you don’t know how much money you have in the bank is the moment to stop spending. If you use your debit card freely and thoughtlessly, you’re probably spending money on unnecessary purchases that will make it more difficult to pay your monthly bills. If paying overdraft fees is not uncommon for you, you need to take a step back and re-evaluate your spending.
You should be checking your bank account at least once a week. If you don’t track every purchase you make, make it a habit to sit down on the weekends and go over the books. Where can you cut back? Where is your money going? Make sure you have a working knowledge of your current finances, especially when you’re making large purchases.
You Use Credit Cards for the Basics
If you find yourself whipping out your credit card to pay for basics like groceries or gas, stop and ask yourself why that is. Are you worried that you might not have enough in your account? Are you trying to keep enough in your savings to pay the mortgage at the end of the month? Did you already spend your gas or grocery money on other purchases?
Make a habit of using your debit card more frequently than you use credit. This will force to you to keep excess spending at a minimum so that you can swipe your debit card or pay cash in the grocery line.
You’re “Used” to Being In Debt
If the words “I’m already in debt, so what’s another $50?” have left your lips, take them back. Put down whatever item of clothing, sports equipment, or electronic device you’re holding and walk away. “Being used” to being in debt is never a good thing, and the further you fall, the harder it will be to dig yourself out again.
If you find yourself regarding debt as normal or part of everyday life, it’s time to change your mindset. The only way to get out of debt is to realize that you’re in financial trouble—once you recognize that you need help, you’ll be able to start taking the proper steps to get your finances in order.
You Avoid Your Bills
When the mail comes, do you find yourself adding unopened bills to an ever-growing pile on your kitchen counter? If you’re avoiding your bills (or the paperless messages in your inbox), it’s time to ask yourself why. Laziness is one thing, but being afraid of the numbers in your statements is quite another.
Sit down, open up the bills you’ve been avoiding, and seek outside help if you can’t afford to pay them all on time. It’s not too late—get financial advising or debt help. A professional financial advisor will be able to help you see where you can cut back, how to consolidate your finances, and set up an official financial plan.
You’re Waiting for the “Windfall”
If you find yourself waiting for that big promotion, the next bonus, or your tax reimbursment, don’t hold your breath. The time to fix your financial problems is now, not whenever the financial windfall decides to sweep in and fix them for you. Chances are, you’ll be waiting for a long time. The longer you wait to get out of debt and organize your finances, the bigger risk you run of them growing too big for you to handle.
Don’t wait for the creditors to come knocking. Take the time now to sit down and put your finances in order. Get professional help if you need it, and don’t be afraid to make lifestyle changes or temporary sacrifices if it means freeing yourself from financial stress.
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