Like a summer storm, financial trouble can happen without much warning. Perhaps you’re in financial trouble right now and have no idea. That’s why it’s so important to know and understand the most common financial warning signs of a debt problem.
There are some people out there who don’t realize that they are one “life-changing” event away from falling into debt. These people might make more than the minimum payment on their credit cards each month. They may even have some money left over at the end of the month. They could have a nice 401k set up also. But the thing that will put them over the edge is the fact that they don’t have any savings. There’s no emergency savings fund, rainy day fund, etc. to help cushion the blow of a life-changing event.
We see it all the time here, people who were making ends meet and didn’t think they had a debt problem or they were managing their money all wrong. Then, something big happens to them, like a job loss, major death in the family, major illness or injury, divorce, etc. The list goes on and on. They now find themselves in some serious trouble and falling into debt. Sadly, it happens all the time.
A growing number of families struggle with excessive financial obligations—you are not alone. It is important to recognize that the way you manage your finances in one area of your life can and often does spill over into other areas. Don’t be fooled into thinking your credit card problems or your lack of savings won’t affect your mortgage or car loan, because they most certainly will, especially if not dealt with swiftly.
There are many challenges that life may throw your way, which can leave your debt spiraling out of control. Whatever the reasons may be, the indicators below are a sure sign that you will benefit from free credit counseling. It’s not unheard of to be a little behind on bills and acquire some debt. However, there comes a time when it can get out of hand. How do you know when you run into a serious debt problem and need debt relief?
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Here are some early warning signs that you may need help:
1. You are avoiding making a budget –
Some people who are facing debt don’t want to face the problem head-on since they are worried about knowing the gravity of the situation. However, it’s important to know how much you bring in every month and how much you owe every month. You need to sit down and face the numbers. This can help you examine your financial habits. You may discover that there are areas where you can cut spending. You may also discover that you simply don’t have enough money to cover your expenses. In this case, you need to determine how to generate more income. Quickly.
2. You have wiped out all of your savings –
Any debt management plan will make room for savings. That’s because the world is unpredictable. You need those savings for when unexpected costs pop up. What are you going to do if you use all of your savings just to get you back on track financially? You need to ensure that you set up your finances so that you have enough to save money every single month. You should save for emergencies, your retirement, and miscellaneous needs. This should be able to cover you no matter what happens in the future, including future financial problems.
3. You are dodging calls from creditors –
Most people have gotten a call from a bill collector at one time or another. However, you don’t want to constantly be dodging phone calls. It’s a bad sign if you have multiple debtors calling you to collect their money. If you let these go too long, the accounts could be sent into collections. Everyone knows just how bad this can be for your finances. Get free consumer credit counseling to learn if you can possibly consolidate your debt into one smaller payment with, hopefully, a lower payment every month.
4. Hiding the truth from the people you love –
You should not have to hide your finances from the people you love. You should be open about your situation. However, debt can be embarrassing. This can cause you to lie. When you lie, you are only putting more on your plate. It can ruin your relationships and even prevent you from getting immediate help you desperately need. If you lie about your finances, it’s a clear indication that something is very wrong.
5. Dealing with depression/anxiety –
Money can be the root of some serious mental problems, such as depression and anxiety. People may notice a serious difference in your behavior. You may seem irritable or stressed. Worrying about debt can have you up all night. When you wake up, you won’t be your best self in order to handle the situation properly. If finances are causing you to require mental help, you need to get to the root of the problem.
Some other signs may include:
- You don’t have enough money in your savings account, or you don’t even have a savings account at all.
- You’re only paying the minimum monthly payment required on your credit cards each month because that’s all you can afford to pay.
- You are often late paying your bills, or you accrue late fees and/or over-the-limit fees often.
- You routinely spend more than you earn each month.
- Your credit limit is maxed out on most of your credit cards or pretty close to it.
- You have a shortfall in your budget instead of having a positive budget.
- You just had an unforeseen life-changing event happen to you, such as a major death in the family, a divorce, loss of income, major medical issues, etc.
- You skip payments on some bills in order to pay others or use cash advances on one credit card to pay off another one.
- You recently got turned down (denied or rejected) for a loan or new credit card.
- You spend more than 20% of your net income on your credit card bills each month.
- You need to refinance a loan to reduce your monthly payment because you can no longer afford to pay it every month.
- You need a co-signer on a loan because you’re seen as a high credit risk.
- Financing your vehicle for six years or more just so you can afford the monthly payment.
- If you’re just opening new cards because you’ve maxed out the other ones or are close to your credit limit.
- You’ve asked your parents and/or friends to lend you some money.
- You have put off important doctor visits or dentist visits because you can’t afford it.
- You are living paycheck to paycheck with no savings at all.
- You rely on money you don’t have to get by each month (credit).
- Your debt is so big that you don’t know the actual amount of just how much you owe.
If you feel as if you are stretched to the max financially, and have no breathing room in your budget, reaching out to a credit counseling agency can help you to create a solid plan of action for regaining your financial standing. The free credit counseling services offered at Advantage CCS can help you improve your financial stability. Working closely with a professional certified credit counselor will help you put your finances back on track while putting an end to pesky calls from debt collectors.
If you fall into a few of these early warning signs, then give us a call today! It’s better to be proactive and understand your current financial situation, then to wait for something to happen and get knocked off your feet and have no options available to you. Call us toll-free at 1-866-699-2227.