9 warning signs: How much is too much debt

warning 9 SIGNS Finance | BM

How Much Is Too Much Debt? When do you know you're in trouble? ost South Africans carry some amount of debt — often a lot of it. Getting into debt is easy, but realizing you've taken it too far takes courage and strength. Many of us might juggle a mortgage, car payment, and student loans without feeling overwhelmed. But if you've ever struggled with a crushing amount of debt, you know the sinking, desperate feeling that follows you wherever you go. You know what it's like to wonder how you got in this position — and how it feels to worry that you'll never dig your way out. Some people don't realize they have too much debt until they actually reach rock bottom, or until their everyday lives become impossible. m

1. You're Adding to Your Balances Every Month . When you're not tracking your spending or watching those credit card balances closely, “adding to the pile” is easy to do. The key to turning this situation around is simply recognizing that your balances were growing in the first place. It may be hard to notice that trend at first when you're not tracking your finances carefully and have always been fine. But once you start tracking your spending, you will be able to make big changes and pay off your debts over time.

2. You're Living Paycheck to Paycheck

Watch it when you start living too close to the cuff. When you start looking forward to payday so you can make minimum credit card payments to avoid the Credit Bureau and then use that available credit to but food…you're in trouble my friend.

3. When You Partner Up and Realize You Have Double the Debt Getting married is a joyous occasion, but what happens when you realize your spouse has just as much debt as you do? It's important to consider this and understand it before you say “I Do” many marriages have been broken because of this mistake. Don't be too much in love and avoid talking about the money issue.

4. Your Debt Payments Cost More Than Your Home If your debt payments cost more than your rent or mortgage, you know it's time to make a change.

5. When Debt Stands Between You and Your Dreams If you have a lot of debt, you may be left with few choices when it comes to your career. With huge monthly payments to service, you may not be able to take your dream job, start a new business, or live the life you truly want to live.

6. Your Net Worth Is Less Than Zero Have you ever checked your net worth on a site like http://www.catalystmag.co.za? If you haven't, it's worth exploring (especially since it's free). By deducting your liabilities from your assets, sites like this show your true wealth. But what if your net worth is negative — if your true wealth is less than nothing? 8. When Your Credit Score Starts to Suffer A good credit score is essential if you ever want to buy a house, take out a car loan, or borrow money to start a business. Unfortunately, your credit can suffer if you owe too much money in relation to your credit limits. Ever get those smses that tell you have been pre-qualified for a loan and you excitedly - with hope - call and your dreams are dashed when you are told your credit score is bad…. Yes, those ones are a sign you are in serious trouble.

What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience? - Adam Smith

7. You Add it All Up, and Can't Believe What You See You've probably read plenty articles like this before, or you stopped reading in the middle because it became too real and hit you in all the spots that make you realize that you are in debt. Here is the truth, avoiding it will not take the reality away. So do yourself a favor; sit down and count. If what you see makes want to curl up and die, don't, do something about it. 9. You can't afford an emergency fund One should always have this fund, especially if you have children. This is planning for unexpected events that may need you to pay some money. If you know you should but you can't afford even R500 for emergency.. my brother or my sister you dear, are in trouble.