Today, accumulating debt has become a way of life. As more of our income is allotted to day-to-day living expenses, there is much less left for retirement, savings, education or personal luxury items.
Debt increases even more when something unexpected happens, such as loss of employment, unexpected home or vehicle repairs or a serious injury. During these occasions, many of us turn to credit and discover that paying down the debt in a timely fashion isn’t always possible. These financial warning signs are indicators to seek help before your debt becomes even more unmanageable.
1. You have little or no savings
In a perfect world, a family should have enough money in savings to survive for three or four months if they were to suddenly lose their source or sources of income. If you have used up your savings, and find yourself living paycheque to paycheque, you may be in need of debt counselling or other financial solutions.
2. You only make the minimum payments on your credit cards
If you are making minimum payments on credit cards, the original balance is not being paid down. If you continue using the card and increasing the balance you owe, you will continue digging yourself into a financial hole from which escape will grow more and more challenging.
3. You are always using your overdraft
If you find that you are continually using your overdraft, you are likely spending more money than you are making. Many people occasionally dip into their overdraft, but using it every month is simply unsustainable.
4. You use credit to pay for basic living needs
In your household budgeting, your monthly income should cover rent, food, clothing, transportation and medication. This includes gas, power, cable, internet and telephone. If you are using credit card or line of credit to handle these payments, that’s a warning sign.
5. Your debts are causing you to feel overwhelmed
When you can’t find a solution to growing debt on your own, it’s not unusual to feel stressed, overwhelmed and helpless. Relationships, work and personal health can suffer when a person is living under a continual feeling of dread or hopelessness.
Hopelessness can often lead to inaction, which only allows problems to get worse. If any of these warning signs sound familiar, you’ll be happy to know that immediate help is available. There are multiple ways to tackle debt and at Faber, our debt restructuring professionals will provide you with a debt restructuring solution that is tailored to your specific situation, without judging. We’re here to help you find a fresh financial start.