10 Tip-Offs You’re Heading for a Debt Disaster

What's Hot

2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Think you might be heading for debt trouble? Answer these 10 questions and you'll know.

Like most of life’s major problems, a debt disaster doesn’t happen overnight. There are clear warning signs that crushing debt could grow out of control.

Here are 10 Tip-Offs that you’re heading for a debt disaster. See how you score.

1. Your bank account is consistently overdrawn.

If you keep getting those thin envelopes in the mail from your bank telling you that your checking account is overdrawn, it’s time to regroup and find out why you’re not keeping up.

Tip: First, stop the bleeding. Ask your bank for overdraft protection for your checking account. But don’t stop there: Track your expenses and find out why you’ve got bigger withdrawals than deposits.

2. Your credit card balances are rising.

Compare the balances on your credit cards from six months ago with your balances today. Are they bigger now? If so, why?

Tip: While periodic fluctuations in your loan balances are normal, if they’re consistently rising, you’ve got to stop, examine your spending and find out why.

3. You’re only making minimum payments on your credit cards.

You’ll never get ahead by borrowing money at 15% on your credit cards every month and taking years – even decades – to pay them off.  Paying interest on purchases translates into paying more for the things you buy. That new jacket you bought for $80 will end up costing up to $240. Do that long enough and you’ll go broke.

Tip: ALWAYS pay more than the minimum. If you can’t, you’re likely already heading toward a debt disaster. Talk to a credit counselor.

4. You and your partner are arguing about money.

Money is an emotional issue. It sometimes causes a power struggle between partners who have different ideas on how money should be handled. If you and your spouse or partner are haggling over bills more than usual, it’s probably because your bills are higher than usual.

Tip: Agree on a budget and a spending allowance, if necessary. Then stick to it. And if money is an issue, communicate about it more often, not less often.

5. Your savings account is busted.

Money experts agree that a savings reserve equal to half your annual salary is mandatory to ride out rough economic times, like the loss of a job or a serious illness. If you don’t have any money at all in your savings account, it’s time to re-examine your budget and see where your money is going every month.

Tip: When you get paid, pay yourself first. Use automatic withdrawal to take 10% of your check and stash it in a savings or money market account.

6. You’re juggling your monthly bill payments.

If you’re applying selective reasoning to your monthly bill payments (“Hmmm – we’ll pay the phone bill this month, but skip the cable bill”) then you’re in over your head financially.

Tip: Lose the cable and any other luxury item on your “to pay” list. In tough times, stick to the staples: home, car, groceries and utilities. You might not think about it, but 20 years ago, nobody had an Internet bill or a cell phone bill. Cut out everything until your income is greater than your out-go.

7. You don’t know how much you owe.

You undoubtedly know how much you make. Not knowing how much you owe – especially not wanting to – is a sign that you’re burying your head in the sand.

Tip: Pay as much attention to what you owe as what you make. Don’t keep your debt out of sight – or out of mind.

8. You’re keeping secrets.

If you’re unwilling to share your spending with your spouse, that’s a sure sign you’re afraid of trouble ahead.

Tip: Come clean. Keeping debt a secret won’t improve your situation. But it will keep you up at night.

9. You’ve got a credit card collection.

There’s only one reason to keep a full deck of credit cards in your wallet – because one or two isn’t enough.

Tip: Even allowing for specialty and cash-back cards, you don’t need more than three. Pay off the rest and close the accounts. And when you close an account, do it right: Here’s a story that tells you how.

10. You’re near the limit on your credit cards.

Credit cards should be for convenience only, not as the source of a continual high-interest loan. If you’re using more than 30% of the available balance, you could be hurting your credit score and heading for a problem.

We hope you’re not experiencing too many of these disaster signs. If you are, however, now’s the time to take control. First step? Sit down and look at exactly what you have, what you owe and where your money’s going. Then map out a written plan to reduce your debt. If you’re in over your head, you can find free help at any of these sources:

And here are some of our stories that might help:

Even if you don’t have a debt problem, it might be good to run some numbers with online calculators to discover things like how much debt you have, how much you can afford to pay, and how to develop a budget or action plan to get out of debt. Here are some ideas:

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: Considering a Fixer-Upper? 15 Ways to Avoid a Money Pit

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,083 more deals!