If you are questioning about your debt level, it is probably true that you have too much!
Latoya Irby ( from “the balance”) suggested 10 signs that you have too much debt to handle. But here I will paraphrase and list the top five.
1. No idea of how much you owe! Running away from a debt crisis does not make it go away. So decide to make a list and devise a plan to settle it. But more importantly, stick to it.
2. Bills paid late because you don’t have cash flow. If outflow is more than inflow you definitely have too much debt. Look at monthly spending and adjust lifestyle and expenses.
3. Phones are not answered because you fear bill collectors. When debt collectors are calling you, your debt is delinquent and you are probably in the unaffordable range. So don’t estimate them but you need a simple work-out scheme and some financial discipline.
4. Borrow money to pay immediate bills. If you are borrowing from family or friends, you have too much debt. This is not a reservoir to tap. Family or friends who also invest must have a perspective that their money may never be returned. If not, it will cause unnecessary tension in a relationship.
5. Financial situation stresses you up. You can’t sleep at night? That’s a sure sign of too much debt or expenses exceed income. Stress will then lead to medical problems with more bills to settle. A vicious cycle begins.
The best way out of the situation is to face it squarely, list the outflow, work-out a realistic scheme and follow through rigorously. That is best said than done! A better way perhaps is to have a professional consultant or mentor and a friend to assist and monitor the work-out plan.