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Recognizing the Signs of Too Much Debt
Last Updated: July 12, 2010
You know things have been tight. But just how bad are they ? If you can agree with most of the following statement, it is time to make some major changes along with a few minor ones in your spending habits.
- You have been late paying your bills more than once.
- You never pay the full amount billed to your credit card accounts.
- Cash advances to cover basic expenses are becoming more frequent.
- Late fees are beginning to appear on such a regular basis that you are surprised when they aren’t listed.
- Bank charges for insufficient funds have begun to eat into your disposable income.
- Making the payments on your installment loans, including your car payment, is becoming difficult.
- Each new expense including appliance repairs, home repairs, dental bills, prescriptions, unexpected doctor visits, or car repairs is a major emergency that you cannot afford.
- You've gone through all of your "emergency" cash reserves, or worse yet, your retirement funds.
If you don’t have any cash reserves to cover unexpected costs, no matter how minor, weathering a recession or even a simple slowing down of the economy is going to take its toll on your financial situation. It is time to attempt a personal debt reduction by developing a personal debt reduction strategy that includes an increase in savings, a decrease in spending, and a reduction in debt.
Here's what to do to stop the bleeding:
- Reduce expenses (yes, no matter how tight things are, you can do this).
- Reduce Debt (if you can accomplish the first step, you can use the extra money in your budget for reducing your debt)
- Stay Out of More Debt (Put Down that Credit Card!)
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