Most individuals know what being in debt looks like. Being able to spot a situation where you need to ask for help can be another thing altogether.
Debt is something the masses know about, whether you’re talking about the necessary car payment or mortgage that hits the bank account every month to the more concerning type of debt, unsecured credit cards that carry with them a high interest rate and a seemingly impossible way of paying them down.
The trick in the debt discussion, however, is being able to know how to spot or manage certain situations when your debt is out of control, and you need more than just the minimum payment and a budget to get you in the right position again.
The issue, sadly, is most of us refuse to identify or we ignore the signs, not because we aren’t interested in financial freedom but mostly because we aren’t sure what to even look for or, in some situations, we just accept how we’re doing things as normal.
Breaking that cycle only can occur when you stop to see what is wrong, and how to fix.
For starters, are you living from one paycheck to another, not able to save any money whatsoever? The paycheck to paycheck means that you literally can’t pay any bills until you get paid, even if they’re going to be a few days late.
Being late on payments means you’re going to be stuck with a lower credit score each time that happens. Anything over 30 days is going to then be reported to a creditor.
And as long as you’re talking credit score, do you know yours? If you don’t, or have no idea of the ups and downs (hopefully ups or at least steady), that’s a sign you’re not as dialed into your finances as you’d like to believe. The credit score is how you’re looked upon by lenders, more so than your income.
Arguably the biggest problem of debt is not knowing how much you actually have. Carrying debt isn’t a bad thing but if you’re not sure how much you have, then that means you have no idea when to stop accumulating it. That simply means you may have a tendency to reason with yourself that another loan, another credit card isn’t going to matter all that much.
The last thing you want is to be swimming in debt and not have the wherewithal to reach for a life preserver in the form of a financial consultant, debt consolidation or some sort of help along the way. There isn’t anything that says you can’t fix the issue yourself, either, but if you’re not paying attention to the warning signs, you’ll continue the same cycle that is leaving you financially flat.
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