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Category: Money

10 Signs of Debt Disaster

Written on July 07, 2010 by Japhet Writ

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You might be having a headache as to why your balance is going down the drain. Chill! Because we will give you the 10 sure signs that you are heading that way.

Acquiring debt is not a phenomenon that happens over night. There are warnings that one is heading onto it. Here are the ten signs that you are in for a debt disaster. See how you score.

  1. More withdrawals and less deposit.

    When your account is always overdrawn, the first thing that you should do is ask your bank for an overdraft protection for your account and start tracking your expenses to find out why you’ve got bigger withdrawals than deposits.

  2. Your balances are consistently rising.

    Compare your credit card balances for the last six months. If they are starting to get bigger and bigger every month, it is time that you stop using your card and start figuring out as to why such fluctuations in your balance account is happening. Seriously, it is not normal at all!

  3. You don’t pay more than the minimum.

    Paying interests on your purchase is equivalent to paying more for the things you buy. The tip here is ALWAYS pay more than the minimum. If you’re not sure about this, it’s better to talk to a credit counselor.

  4. You and your partner always argue about money.

    Money can sometimes be an emotional issue when you and your partner have a different idea on handling money. When you and your significant other power struggle about your bills frequently, it’s because your bills are higher than the usual. It’s best that you agree on a budget and expenditures and live by it. If money is an issue, NEVER keep it a secret. You should communicate about it.

  5. You do not have any money at all on your account.

    Money experts agree that it is mandatory to save half of your annual salary to cope with the economic crisis such as job loss or medical instances. But when your savings account looks busted, it’s high time to re-examine your budget and see where your money is going every month. It’s best to pay yourself first every time you get your paycheck.

  6. You’re using selective reasoning to your monthly bill payments.

    When you  have the “We’ll pay this bill this month but will skip the other bill” attitude more often, it only shows that you are over your head financially. The best solution to this is to lose all the luxury items in your to-pay list. Stick to staples like home, care, groceries, and utilities. Cut everything out until you have an income that is greater than your expenses.

  7. You are keeping your debt out of sight.

    You are definitely burying your head in the sand if you know how much you make but doesn’t know how much you owe. It’s best that you pay attention on what you owe as what you make.

  8. You’re keeping your expenses a secret.

    Just like what was mentioned earlier, if money is an issue, you should talk about it to your spouse. If you are unwilling to talk about your spending with your partner, it’s a sure sign that you’re afraid of the trouble coming ahead. Just a reminder: your significant other is the person most likely to be around to help when things fall apart.

  9. You’re collecting credit cards.

    You have a deck of credit cards in your wallet because one or two credit cards is not enough! Honestly, you don’t need more than three even if you’re allowing for especially and cash-back cards. Pay off the rest and close your other  accounts the right way.

  10. You’re using more than 30% of your available balance.

    A rule of thumb here: credit cards should be used for convenience only. If you are using it for a continual high-interest loan, you might be hurting your credit card score. That’s a huge problem!

We sure hope that you are not experiencing any of these ten signs of credit card problems. But in case you are: Just sit back and relax, look exactly at what you have, what you owe and where your money is going. Then create a plan that can help you reduce your debt.

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