Debt - How to Tell if You're in Over Your Head. (June 2008) Do you have debt that is holding you down and keeping you from reaching your financial Freedom? Using credit and debt can be a powerful tool that allows you to buy a home, a car, send children to college, a new kitchen and even provide leverage for other purchases, but when you accumulate too much debt, it will cause a serious problem. Keeping up with those debt payments is only part of the problem.  Just because you can afford to fit these payments into your budget, you’re still putting added strain on your finances. Money that is used towards paying down debt can’t be used to better effect elsewhere.  That means if you’re spending money each month on credit card or other unnecessary debt, you’re taking money away from other areas of your expenditure that can be used to build your wealth, plan for the future and allow you the financial freedom we all desire. It can be difficult to actually realise when you’ve reached that point with your debt situation causing your disposable income to be consumed by debt repayment but there are some warning signs that can help you identify the problem before it becomes too serious. 10 Warning Signs of too Much Debt 1.      You don’t have any savings. 2.      You only make the minimum payment on your credit cards each month. 3.      You continue to buy more on your credit cards while trying to pay it off. 4.      You have at least one credit card that is near, at, or over the credit limit. 5.      You are late in making payments on bills, credit cards, or other expenses. 6.      You don’t even know how much total debt you actually have. 7.      You use cash advances from your credit cards to pay other bills. 8.      Your cheques bounce or overdraw your bank accounts. 9.      You’ve been denied credit. 10. You deny to friends or family about your spending and debt. Sometimes we know deep down that we are overspending but it is easier to deny the problem than to address it.  Correcting these difficulties can be a little painful and require hard work, but the sooner you look at your true position and understand just where you are with your money the sooner you can begin to make positive changes.  Delaying those changes will only prolong the problem and make it worse.   Take a Positive step now The most important thing you need to do is find out exactly what your financial position is. List your income and all your outgoings so you know exactly where you stand with you finances. Where you find you are overspending you need to decide where you can make savings. For our Home Payments clients, use the Income and expenditure planner in the Client login section of our website. You already know how much your bills cost you with your financial plan. If you have not included all your bills in your plan presently, consider adding them in now so you have a clear picture of your overall finances.  If you unsure how best to tackle your financial planning, seek advice, there are many services who assist in financial planning, including ourselves obviously. They don’t teach financial planning and money management in school but we are all supposed to know how to do it! Don’t be afraid to ask for advice.