Your debt-to-income ratio tells you and potential lenders if you're carrying too much debt, but there are signs that can help you figure out if your debt situation is getting out of control in the first place. There's no math involved but you do need to ask yourself some questions and be honest about the answers — being in tune with your debt profile can help you steer clear of big trouble down the road. If any of these statements apply to you, it's time for you to reevaluate your finances and devise a plan to make changes that will get you back on track.
- You don’t have any savings.
- You only make the minimum payment on your credit cards each month.
- You continue to make more purchases on your credit cards while trying to pay it off.
- You have at least one credit card that is near, at, or over the credit limit.
- You are occasionally late in making payments on bills, credit cards, or other expenses.
There are five more on the list so just read more.
- You don’t even know how much total debt you actually have.
- You use cash advances from your credit cards to pay other bills.
- You bounce checks or overdraw your bank accounts.
- You’ve been denied credit.
- You lie to friends or family about your spending and debt.
Napapijri
Tibi
Rimmel
Scary! But there are so many people I know who don't just fit one or two of those categories, but all of them.
But what I've learned that it's less scary to just face the debt and get it over with than to dodge the bill collectors and live in shame. Debt is something that can be solved through patience, a little know-how, and the support of friends and family.
1Hmm, either your are financially irresponsible... or you're about to get married, are currently a Ph.D. student making next to nothing, and marrying a 4th year medical student making absolutely nothing. Weddings are absurdly expensive.
2Truth be told, I may not be well off financially now, but I'm not at all worried about the future, once we're both making an actual income we'll be very well off.
I sure learned my lesson when I was unemployed at one point with massive credit card debt and a car loan. It was scary, but once I started working again, I started paying my cards down, not using the cards and putting money away in a savings account.
3I could not live like this. I would go crazy with worry!
4as a GA in school full time, I have a hard time not living on credit. in fact, if i don't sometimes i don't eat... but i aspire to be debt free! it's a goal!
5It sucks to be in this position. I was unemployed for a time and when unemployment couldn't pay the bills unfortunately I had to use my credit cards. It is awful but I am slowly digging myself out. Sometimes you gotta do what you gotta do to survive.
6life is hard but worrying about debt is harder. it's better to live within your means
7I have debt and need to be more responsible. But it is very hard nowadays.
8Whoopsie.
9It does suck to go to school and try to work to pay off debt from when I was in my late teens - early twenties.
10haydee.. not an option for everyone, did you read the posts from students?
if it's between going to school, or not.. GO TO SCHOOL.. debt sucks, but money is money, and advancing yourself in life will not only help you pay off your debt, but will also benefit you in other areas.. sometimes you just have to do it and then face the consequences.
and for everyone who has just screwed up.. read Suzie Orman's book, young fabulous and broke.. it definitely helped me.
11i screwed up, but if this is my only screw up in my early 20's, then whatever i can handle it.. no it's not fun to pull yourself out of debt, but you just do it.
phatE, you are absolutely right. I would take education over a salary anyday (provided it is education with a point and an end in mind). While I thankfully haven't had to go into DEBT for my education (no undergrad debt, full scholarship for graduate school), I'm certainly not making in my stipend even half of what I would be making if it I had a real job (I have an acquaintance --- no college experience, GED, works at Starbucks 35 hours/week and makes $9,000 MORE than I do in a year), but I a marrying almost $200K in debt from medical school loans. But you know what? It's worth it. I wouldn't trade my education, or his, to have his debt eliminated in a second. While yes, you can get a decent job with less education, the more you have, the better you can do career wise, and we each needed a MD/PhD in order to do what we wanted with our lives, and it would have been a huge waste to NOT obtain our life goals meerely because we were afraid of beeing poor/in debt for a couple of years.
12I can answer yes to some of those statements and I don't feel I have any sort of debt problem. I'm steadily paying off my debts and my fiance is also paying off his debts. My credit worthiness is above average and I'm not concerned. I think those statements should fall under the category of "you should consider taking a look at your finances if any of these statements apply to you". Things have to happen and have to be bought sometimes, debt is unavoidable... unless of course you really can save up for that 100,000 house.
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