Chapter 1. How much debt is too much?

From a practical approach, you need to know how much debt is too much.

 

How to

How can we recognize the signs of being in debt and how can we make a plan to control spending? These are the signs of being in debt. 

1. You have no significant savings
2. You are paying more than 10% of your monthly net income for your outstanding debt
3. You are paying the minimum amount on your credit card monthly bill, and your outstanding balance is increasing each month
4. You are paying late fees on bills you did not pay by due date
5. Your utilities are threatened to be disconnected
6. You are receiving collection Dunning letters (notification letters that are sent to consumers for late or non-payment) or phone calls
7. You don't seem to get ahead even with having more than one job
8. You are stressed out and worried you might lose your home, your car, etc.
9. You can't realize your financial goals in life, and you feel STUCK!

STOP - If you are experiencing any of the signs above, you need to stop all new spending and take a time to assess your financial situation.

 

Practice

Can you add to the list above? If so, think about it and discuss your ideas with a friend or a family member.

 

Congratulations!  You can move on to Chapter 2. In order to manage my debt where should I start?

To review the full module on Debt Management, click here.