Warning Signs Your Debt Is Out Of Control
Debt can be the bane of our financial existence and hinder growth and opportunities in many facets of life. However, if managed right, debt can also be an asset in an attempt to build financial wealth and overall prosperity. Here, we will examine some signs that your debt is out of control and help determine if it’s time to take action and make some changes. Though this is by no means a comprehensive list, here are six of the major warning signs:
1. You Don’t Know How Much You Owe
Knowing how much you owe is a key component to staying in control of your debt. Therefore, not knowing your total is a major sign that your debt has you in over your head. In addition to not knowing how much you owe, there is another key sign to watch out for: are you afraid to open your bills when they show up in the mailbox every month? These two signs often work in conjunction with one another. Both add up to being in denial about the full scope of the debt. Knowing exactly where you stand is a significant part of owning your debt and staying in control of your finances.
2. You Can Only Make The Minimum Payment
If you can only pay the minimum payment every month, there is a good chance that what you can pay is only going toward the interest built on to the card on the initial charge. When this happens, you are not paying down the actual total. Ultimately, this is counterproductive; it can add years on to your debt payments and unknowingly find you paying an exponentially larger amount than what you initially charged.
3. All Your Credit Cards Are Maxed Out
Having maxed out credit cards can be more about assessing your spending habits then it is about reining in a total. If your credit cards are maxed out, you might be in the destructive habit of living above your means and relying on credit to bridge the gap between what you are buying and what your income allows you to afford. In the bigger picture, this can also affect your credit score. The frequency with which you use your credit cards is monitored; this number comes into play when calculating your credit score. High usage is seen as problematic and will often negatively affect your score.
4. Can’t Make The Payments On Time
Credit scores are also determined by the customer’s ability to pay on time. Consistently late payments could be a sign that you are avoiding the bills when they show up in the mailbox, and this is another nod to your financial habits. It is also a significant sign that you can’t afford to pay the bills with your earnings; many people stagger their bills out and pay one set in one billing cycle and a separate set the next billing cycle. It is crucial to be able to pay all bills within each cycle on time. Not being able to do this can be a significant sign that you need to reevaluate your spending habits and your payment procedures.
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5. No Available Savings
In this day and age, having available savings is incredibly difficult. But it is vital and necessary if some emergency hits—and emergencies are one of life’s guarantees. If all of your money is going to pay down debt, you cannot build up savings. If you already have savings but find yourself forced to drain that account to pay off credit cards and other debt, this is also a problem. Discipline is a hard skill to master for even the most financially savvy consumer, but it is a must.
6. You’re Receiving Calls From Debt Collectors
This sign is arguably one of the most anxiety-inducing. Phone calls from debt collectors are not fun and can sometimes feel like harassment. But there is a reason for this: if you are receiving phone calls, your bills are most likely very delinquent. The phone calls are a last-ditch effort to collect on a payment before other avenues are explored. This could include lawsuits, repossessions, or even wage garnishment. In any event, receiving a phone call from debt collectors is a serious sign that you need to take action. You need to face your debt, get on a budget, and teach yourself to follow that budget with utmost discipline. It is not easy, but it can be done.
Take Action When Your Debt is Out of Control
If you or someone you know recognizes any of these signs and would like to take action, UmbrellaDEBT can be a valuable resource for you. Our company will try to work with you to figure out the best options for you when it comes to debt consolidation. You can then rest easy in the knowledge that you’re on the best path to taking control of your finances and eliminating your debt. Contact UmbrellaDEBT Relief today to get started.