Our society makes it so easy to get into debt and even to quickly get in over our heads.  There are charge accounts, credit cards, personal loans, payday loans, mortgages, auto loans, etc.  There are so many possible ways to "owe" money that your head is probably spinning right now!  The problem, however, is that it's much easier to get into debt than to get out of debt. 

You can visit a local credit union, fill out a credit card application by mail, or even make a quick phone call in some instances and add to your already growing debt pool.  So literally in just moments, you can have thousands of dollars in your hands...ready to spend!  But unfortunately, easy access to credit means ongoing debt problems for many people.  Here are some ways to recognize if you are in danger of having too much debt.

Trouble with Payments

If you are unable to make your payments on time and even have to skip a month occasionally, this could be a sign that you're in over your head.  Debt payments should not rule over your life.  Yes, we do often need debt to live but it should be enabling us to live better and not controlling us with never-ending stress.  If you find yourself borrowing from one area of your finances to pay for another, this indicates that your finances are off balance.

No Savings

If you have no savings to your name, you might be in trouble.  You should try to save for home or medical emergencies, a cushion or nest egg for your golden years, and even for next month's upcoming school function!  It's important to have some money in savings just in case an emergency occurs, such as a medical need or a broken major appliance.  If one of these occurs while you have no savings, then you'll have to borrow even more money to take care of the need.  This can start a snowball effect that can last for many years.

Minimum Payments

If you find yourself only making the minimum payments on your credit cards, then you've probably taken on too much debt.  Credit card balances should be paid in full each month to avoid interest charges.  The high interest alone will eventually drain your finances if you're not careful.  If you can't budget for credit card use and avoid the high interest, then throw it away.  You'll thank yourself later!

Credit Denial

If you get a denial letter instead of an approval the next time you apply for credit, then be sure to examine the reason for the denial.  If it states "debt-to-income ratio too high" then you have too much debt.  The bank or credit card issuer knows that if you take on more debt, it could lead to serious financial trouble.

Overdrawn Bank Accounts

If you continuously have an overdrawn account or bounced checks, then it's time to re-evaluate your debt situation.  You may be paying out more than you're taking in.  It's easy to bounce a check if you're always living on the edge with very little in your account.  Even one small mistake in your checkbook can wreak havoc!

These are the main ways to tell if you have too much debt.  It's time to step back and take a look at the big picture.  Where can you cut back in spending to put toward a savings account and pay extra on your debt?  Can you pay a little more each month to pay a bill off sooner?  Can you renegotiate terms or payment amounts with a few of your creditors?  Having too much debt is a dangerous way to live and yet millions of people do it.  Start taking steps now to improve your debt situation!