Warning Signs of Too Much Debt: How to Know You're in Over Your Head

••• Woman doing household finances. Credit: H. Armstrong Roberts / Stringer / Getty Images

Do you have debt that is bogging you down and keeping you from reaching your financial goals? Using credit and debt can be a powerful tool that allows you to buy a home, a vehicle, send children to college, and even provide leverage for other purchases, but when you accumulate too much debt, it can pose a serious problem.

Keeping up with your debt payments is only part of the problem. Just because you can afford to fit these payments into your budget, you’re still putting added strain on your finances.

Money that is used towards paying down debt can’t be used elsewhere. That means if you’re spending money each month on credit card or other unnecessary debt, you’re taking money away from other areas of your budget that can be used to build wealth and plan for the future.

10 Warning Signs You Have Too Much Debt

It can be difficult to actually realize when you’ve reached a critical point with your debt situation, but there are some warning signs that can help you identify the problem before it becomes too serious to address. Here are a series of statements to compare to your situation.

If any of these 10 debt warning signs apply to you, it is time to stop and take action to remedy the problem:

  1. You don’t have any savings.
  2. You only make the minimum payment on your credit cards each month.
  3. You continue to make more purchases on your credit cards while trying to pay them off.
  4. You have at least one credit card that is near, at, or over the credit limit.
  5. You are occasionally late in making payments on bills, credit cards, or other expenses.
  6. You don’t even know how much total debt you actually have.
  7. You use cash advances from your credit cards to pay other bills.
  8. You bounce checks or overdraw your bank accounts.
  1. You’ve been denied credit.
  2. You lie to friends or family about your spending and debt.

Take Action Now to Handle Your Debt Problem

Sometimes we know deep down inside that we have a debt problem, but it is easier to deny the problem than to address it. If you fall into this group, you're probably still worried about it, despite being in denial. You might be surprised at how much you alleviate your worries once you face up to your situation and begin addressing your debt issues.

Yes, this can be painful and require some hard work, but the sooner you realize that you are in over your head, the sooner you can begin to make positive changes. Meanwhile, delaying changes to your spending and debt habits will only prolong the problem and make it worse.

If you don’t think you can tackle the problem alone, don't let that dissuade you from tackling it altogether: There are people out there willing to help.