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8 Signs You May Have a Debt Problem

The cost of living and prices for consumer goods have soared everywhere. Naturally, stress levels have increased due to the inflation and uncertainty that comes with it. More than 3 of 4 Americans today are anxious about their financial situations. A recent national study shows that most U.S. adults are concerned about debt. 

  • 68% think they don’t have enough money to retire
  • 58% feel that finances control their lives
  • 56% believe they can’t keep up with the cost of living
  • 45% say they have trouble managing debt levels every week

Although economic troubles affect many adults today, there is still a need to feel financially fit. That’s when the bad habits begin, and the warning signs pop up. No one enjoys looking at a bank account with nothing in it. What’s important is that emptiness doesn’t have to be permanent. The key is knowing those signs, reading them, and doing something about them. 

What are they? Here are 8 of the most obvious signs you may have a debt problem. 

1. Overdraft is Normal

The causes of a debt problem are numerous, but one thing among all the results is overdrafting. You may spend too much if your bank account routinely overdrafts before payday. Some payments are automatically deducted, and others wait for you to pay the bill. However, sitting in front of a screen with your negative checking account balance may be expected. If that’s the case, good or bad debt spiraling out of control could be around the corner. 

2. Minimum Payments are Normal Also

Minimum payments on multiple cards create a debt problem.

Sometimes, you use enough money for minimum payments on primary bills to put enough aside for a more significant purchase or a down payment. If that’s a pattern of prioritizing money, it could signify a looming debt problem. With minimum payments comes maximum interest, which can hurt your bank account in the long run. Consider budgeting with firm constraints. Become accountable to your outgoing money. Lastly, bring your expenses down so your payments can go up. 

3. Borrowing from Family or Friends

Few things are as uncomfortable as asking people you trust for money. The reason doesn’t matter. Asking your inner circle for cash can make everyone feel awkward. You didn’t want to ask but have nowhere to turn. They want to help but are more concerned with you. And then, if you can’t pay it back within a decent amount of time, the debt becomes the elephant in the room. The point is you’re out of options to pay what you owe, and that far in debt is nowhere to be. 

4. No Budget Plan Out of Your Debt Problem

In debt consolidation services, we offer a streamlined plan with a clear finish line and a path lit up like an airplane aisle. The plan to consolidate your debts includes minimizing payments, shortening the time to pay debt back and finding new ways to maintain financial wellness. Without that plan, there’s no starting point and little hope to make it happen. You can do it yourself by negotiating with lenders and asking for help. However, other options exist to get a plan and see it through. 

5. Avoiding Responsibility 

Have you ever borrowed money from a loved one for bills and used it on a vacation? What about getting a cash advance on a credit card when you have late bills and buying some clothes instead? It happens more than you think and may have happened to you more than once. If you feel forced to cover up to others–or yourself–why you spend what you spend, that debt problem needs to be explored. Specifically, how can you end it and start being honest about your finances again? 

6. Impulsive Spending

Spending outside of a budget could be a debt problem.

If you struggle with debt for any time, you get fed up with people telling you, “No, you can’t buy that” or “Sorry, you don’t have enough money.” You reach your emotional limit one day, so call your cards to see if you’ve reached those limits. Frivolous spending is not a good idea, but it does become a cathartic experience. A trip to the mall for a new outfit or a night out on the town is all it takes to feel “normal” for a day. If you’re searching for an escape from debt, your budget is probably out of control. 

7. Transferring Debt

You may have heard the debt-related adage, “Robbing Peter to pay Paul?” Simply put,  it’s transferring money from one pot to another without adding new money. When someone hasn’t accepted their debt problem, they look at the credit card limits. They look to move a balance from one to the other. Usually, this is the first step to getting out of debt–searching for those 0% promotional APR cards. It can work, and you can do it, but it can be a struggle. 

8. Ignoring Contact

We hear this frequently at Beyond Finance with clients in our debt consolidation services because some people struggling with an overwhelming amount of debt experience emotional triggers. When faced with “Financial PTSD,” the phone ringing or even the mailman showing up can cause anxiousness or fear. Ignoring the phone and not going to the mailbox can help someone’s mental health, at least for a day or two. 

There are multiple other ways to begin your journey of financial independence. Prices are still going up, and hope is going down. If you can’t control your finances, don’t lose your desire to want to reach financial independence. Most importantly, if you need help, there’s something admirable about recognition and doing something about it.