10 Signs To Know When You’re in Debt

Ask anyone you know how they feel about 2020, and they’ll likely tell you it was the worst year of their life. But the pandemic wasn’t bad from every perspective; there were some positive takeaways. Americans came to understand the importance of what matters most. From that came the Great Resignation and the creation of more home-based businesses than ever before. Because of that, lower-wage jobs were forced to provide better pay, and higher wages invited more spending. You know how the saying goes — the more we make, the more we spend.

But earning higher wages doesn’t necessarily mean we have more money to spend. In fact, many of us live paycheck to paycheck or even worse — are in the red at the end of the month without fully realizing it.

10 Signs That You’re in Debt

As America hits its debt ceiling and struggles to avoid a catastrophic default, individuals should also contemplate their debt health to know if significant life changes are needed. How do you stand against the high-stakes war of debt? Would you even know if you were about to have a financial fight? Many people are in serious debt, but denial has kept them clueless. It’s time to know where you stand with debt.

Here are 10 signs that should be a warning to you that you may be in debt:

1. Avoiding Your Mail

I’m sure at one time in your life, you enjoyed running to the mailbox to see what had arrived. But as time passed and responsibilities kicked in, we didn’t always look forward to what was coming. That’s because it’s bills, bills, and more bills. If you’re so bombarded with bills that you don’t even take the time to open them and leave them stacked in a corner, that’s a sure sign that things are out of control. It’s never an issue receiving a bill when you know you have the money to pay it. Only when you’re strapped will leave you to avoid the bill in the first place.

2. Receiving a Lot of Calls From Creditors

We all get an annoying call from a creditor occasionally, but when they start calling every other day, that’s a bit much. If multiple creditors call you throughout the week, that may be a time to pause to reflect on your debt state.

3. Getting Turned Down for Credit

It’s never pleasant getting turned down for credit. In fact, it can be downright embarrassing. But when it does happen, it’s because your credit score is too low and/or your income-to-debt ratio is not good. That piggybacks on your credit utilization rate, which can reflect how much you have to pay out versus how much income you bring in. If you’re spending more than you’re making, it’s a sure sign that you have a debt problem.

4. Needing Credit Card Advances

Some would say that having a credit card that allows you cash advances is like having icing on the cake, but it’s not as great as it sounds. First of all, the fact that you need to get a cash advance from a credit card signifies that you’re strapped for cash. In other words, you don’t have any. Not only is this a loan from your credit card company, which means you’ve created more credit card debt, but now you’re saddled with additional transaction fees, and interest fees and some card companies charge a higher APR for a cash advance. So, while the advance may offer you the cash you need at the time, it’s also costing you a lot. This is not a wise move for someone who’s already in debt.

5. Using Credit Cards To Pay Your Monthly Bills

If you’re using credit cards to pay your monthly bills, it’s a sign that you’re not earning enough income to cover your expenses. While you’re only covering the minimum credit card payment, your debt is piling up like pancakes.

6. Affording To Pay Only the Minimum

Speaking of minimums, this is nothing to write home proudly about. Limiting your credit card payments to paying only the minimum will keep you in debt for what could seem like a lifetime. The quickest way to get out of debt is to pay more than the minimum. But you can’t do that, if you’re so deep in that you can barely afford to pay the minimum.

7. Transferring Debt

Transferring your debt to a low or zero-interest card can be wise if you intend to pay off the balance as quickly as possible to get rid of your debt. But if this is done to give yourself breathing room to spend more because you’re short on cash, it’s a sign for help.

8. Borrowing Money From Friends or Family

None of us like to go here. Borrowing money from people we know comes with its share of heartaches, and there’s only one reason we’d do this — because we have lost control of our finances.

9. Draining Your Savings Account

Having a savings account is a haven when you’re short on cash. However, if you constantly have to utilize it to get through the month, it can quickly dwindle without you even realizing it. If you’re continually withdrawing without having the money to deposit, you’ll eventually be left with no savings, and you’ll still be in debt.

10. Not Being Able to Sleep at Night

Our financial worries can leave us in a state of restlessness, to the point we can’t even sleep at night. If you have money problems and struggle to get to sleep, you may need more than warm milk. You’re likely worried about tough times ahead of you.

The Bottom Line

Being in debt is a circumstance that can be retracted if dealt with quickly. It’s only when we live in denial and don’t see our current circumstance for what it actually is that causes our debt health to become catastrophic. Staying in denial can take us from being in a little debt to having a huge amount of debt. Start paying attention to your finances and take the time to really assess your debt situation. You have the power to be in control of your finances.

Read More: A Complete, Step-By-Step Guide to Getting Out of Debt