How to Know You Have Too much Debt?

Nearly everyone has some form of debt - a mortgage, credit card, car or college loan, etc. Many people are able to responsibly handle multiple credit accounts with little conflict, but how do you know if you're carrying too much debt, missing the mark in financial management and at risk of overload? There are some obvious indicators like running out of money or having to borrow from friends and family. Here are a few signs you may not have considered.

· Saving account is tapped out! Although this may be an indication of poor spending habits, it's more often in addition to a debt problem.

· Hide spending from family members. Do you avoid letting loved ones know when you've been on a shopping spree? The only reason to hide spending is because you're worried about their response. If you can't be honest about your money habits you may have too much debt.

· Trouble sleep at night! Financial troubles are stressful, and stress can cause insomnia. If you're tossing, turning and losing sleep worrying about how you're going to make ends meet, you have too much debt.

· Alcohol, drugs or tobacco use. Destructive habits like these may relieve stress or help you forget for a bit but may contribute to overwhelming debt.

· Dread answering the phone. When a delinquent account has been turned over to a collection agency, the phone calls will come. You know you owe the money, don't have the means to pay and have too much debt.

· Make late payments. Juggling too much debt can be tricky and will often lead to late or missed financial obligations. If you're regularly making your payments late, you probably have too much debt.

· Borrow money to pay your bills. Whether you're indebted to a company or a family member doesn't change the fact that you have too much debt.

· Depend on credit cards to make ends meet. If you're paying for general living expenses with a credit card, it's a sign of financial trouble. Not having enough money to sustain your lifestyle may be a sign of too much debt.

Perhaps one of the most insidious signs that you have too much debt is when you don't even know how much you owe. Hiding from your debt doesn't make it go away. The only way to get a handle on it is to know how much trouble you're in and make a plan or ask for help.

One way to determine how much debt you have is by comparing your debt to your income. Add up your monthly debt and divide this number by your monthly income. Multiply that number by 100 to come up with your debt-to-income ratio. An excellent ratio is 30% or lower, while a ratio over 40% is a red flag that you have too much debt.

If you do have too much debt, there are many helpful tips to put into action in order to start getting it under control. If you find it difficult to do on your own, a debt settlement program can be of great service to utilize.