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4 Ways To Know If You Are Financially Overstretched And Are Headed For The Debt Hole

4 Ways To Know If You Are Financially Overstretched And Are Headed For The Debt Hole

One of the reasons you could be living in debt is because you are financially overextended.

If you never take the time to look at how you are spending your money, you have probably been digging yourself into debt for a long time.

It is never too late to learn something new about money and responsible debt management. If you are on the brink of disaster, there are things you can do to change your spending patterns and get debt relief.

Ask yourself the below questions and if the answer for any or all of them is ‘yes’ you could be heading for difficult financial times ahead, therefore you need to do something before it’s too late:

  1. Are you spending a lot on your credit card and paying off only the minimum amount?

One of the most common credit card spending mistakes is paying off the minimum balance and rolling over the balance to the next month. You could be rolling over thousands of dollars in credit card balances.

Credit cards have high interest. Every time you roll over your balance, the company charges you more interest for items you have already used.

If you find that you cannot pay down your whole credit card balance, it is a sign that you don’t have enough money; therefore you should not be incurring any debts.

To pay down the whole credit card amount, visit a debt relief company where you will access debt repayment solutions that have lower interest rates. Click here to see how a debt relief agency can help you.

If you decide to get another card after you pay off your debts, only charge the card for amounts that you know you can pay off in one go.

  1. Are you struggling with your bills?

You should not be having any difficulty paying your bills. If you are, it is a sign that you have a money problem.

The only way to handle this is by reducing your financial commitments. No doubt, your debts are some of the bills that you are struggling to pay. If this is the case, your situation will only get worse as late charges and overdraft fees will continue to pile up.

  1. Is your retirement underfunded?

Your retirement fund insures your future. If you have not been making any contributions or you have been spending your retirement funds on other uses, you will have problems in the future.

Avoid rationalizing your need to spend your retirement fund by arguing that you need to pay for your current needs. There are other ways of repaying your debts and getting debt relief without touching your retirement fund.

  1. Are you using 100% financing on items?

Getting 100% financing on purchases is an easy way to afford the things you want. However, even though you will get the item, you will pay a lot of interest for it.

If you find yourself enticed by a 100% loan, this is a sign that you are or are going to be, in a financial mess.

Getting into a situation where debt runs your life can be a slow but sure process. However, if you look out for the above four, you might dodge the bullet.

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