One thing about having a lot of debts is the amount of stress that is attached to it. Indebtedness is a major stress inducer that every business owner wants to avoid. Most times, this is as a direct result of the harsh economic conditions we find ourselves with much more bills than we can handle which leads to indebtedness. We want to avoid it at all costs. Having debts though is one thing, having too much debt is on a different and more complicated level. Beyond elevating your stress level, too much debt could affect your finances and can be humiliating in some cases.
This all gives rise to an urgent need to monitor our debt. Just how much debt is too much? Debts, high or low, are relative to the individual who incurred them, their income, their savings and their money habits. Here are a few indicators that the debts you’ve incurred have become unhealthy to your finances.
You don’t know how indebted you are
The fact that you can’t say for sure how much you owe is a clear indicator that you may have more debts than considered healthy. A lot of people owe so much they are too scared to keep track of the amount they owe. Others simply don’t care as they are nonchalant towards their finances.
You may not be financially capable of clearing your debts but it is a great idea to keep track of them. It not only keeps you informed of your status but motivates you towards clearing your debts.
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Your bills keep piling up/you become selective in paying bills
The only reason you have more bills is because you have a lot of debts. Bills pile up when you don’t pay them. They don’t disappear. Rather they form this huge debt that leaves you feeling like you’ve dug a big hole for yourself at the end of the day. When you notice that you’ve become selective in paying your bills, you probably have a debt problem.
The best way to avoid this is to try footing bills as they come. Don’t let bills sit for so long. Most bills come on a monthly or yearly basis so it doesn’t exactly take you by surprise. Plan your money in a way that will enable you take care of your bills.
You don’t have a money-plan (budget)
If you aren’t making money-plans its most likely you have huge debts. There should be a plan in place for settling outstanding debts in order to reduce overall debts. Make provision in your budget for clearing off old bills. Have a working plan on how to handle your debts.
You’ve used up your savings
If you’ve gotten to the point where you’ve used up your savings for paying debts and you don’t have anything set aside for rainy days, your debts have most definitely gone overboard. Don’t allow your debts grow so much that they start eating into your savings. Consider your savings a sacred part of your finances.
You’re always borrowing
The funny thing about people who borrow a lot is that they never have enough to pay and they are always coming back to borrow more making their debts to pile. If you borrow so much from all indications your debts are going to be too much as well. Try to live on what you earn and if what you earn isn’t enough look for other means to support yourself.
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You’re constantly thinking about your debts
Each time you think about the debts you’ve incurred you get extremely stressed but unfortunately you found you that you’re always thinking about your debts. There is only one possible explanation for it; your debts are too much. When your debts are too much you’re most likely going to keep stressing over it every day.
Try to help yourself by keeping debts to a minimum. Pay off old debts and manage current bills with tenaciously and with discretion. The fewer your debts, the better. If you find that you fit into one or more of these categories, you need to make a plan on how to free yourself from indebtedness else you’re heading straight and fast towards bankruptcy.