Debt is one of those silent killers that simply sneaks up on most people. There are endless reasons that people go into debt, from simply spending too much to having a true emergency. One of the best things that can happen is that you realize your situation before you become absolutely overwhelmed.
I know that most people live paycheck to paycheck. It seems as if it is simply human nature to spend what we make down to the last cent. However, if your bank account runs dry before you get your next paycheck, you have too much debt. You are spending too much. A good financial situation has you paying your bills, paying your necessary expenses and putting money into savings.
If you find that you can't pay your bills each month, you have too mcuh debt. You should never have to choose one bill over another for payment. Your bills should not exceed your income. If they do, you need to start cutting costs immediately.
When you are denied for credit, this is a good sign that you can't take on any more debt. You are becoming a risk. If you don't know why you were turned down, ask. Order your credit report immediately and see what is wrong. If it is the amount of debt you have keeping you from acquiring additional debt, you need to take steps to pay down your debts as quickly as possible. You should always have a large portion of your credit unused. If there was an emergency, you might just need a quick loan.
If you fall back on your overdraft protection from your checking account, you need to reasses your budget. If you have too many bills, chances are that you have too much debt. You should always have money in your checking account. If you don't, you need to pay down your debt, lower your monthly bills and take a hard look at your spending.
When you have maxed out your credit card, or cards, you have way too much debt. A credit card isn't meant to be maxed out. You should try to never carry a balance from month to month. If you do, make sure that the amount you owe leaves you with a large amount of available credit - keeping your options open and your credit score up.
How many credit cards do you have? If you have more than three, you have too many. You should only have one credit card, for emergencies only. Work to pay off your credit cards and cut yourself down to one.
You shouldn't use your credit cards for everyday living, such as paying the bills or buying groceries. If you pull out the credit card at the store on a regular basis, just in case, you shouldn't carry it on you. I always suggest that you keep your credit card in a safe deposit box at the bank. This keeps the temptation under lock.
How much are you paying towards your credit card debt? If you are only making the minimum payment each month, you will pay on that debt for the rest of your life. If you are only able to make the minimum payment you have too much debt. Find a way to make extra payments, even if you have to take on a second job or cut off your cable service.
If you can't tell me right now how much you owe to your lenders, you are in too much debt. If you don't know what you owe, how do you know how to pay it off and manage it. Sit down and really look at who you owe, what you owe and how much you are paying each month. Form a repayment plan that will pay off your debts more quickly. Too much debt will cost you too much. Take action today and save yourself hundreds and thousands of dollars later.
Martin Lukac http://www.MartinLukac.com , represents http://www.RateEmpire.com , an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com