7 signs you’re in debt over your head

  • Jun. 29, 2017 3:18 p.m.

Sometimes the first sign of debt trouble is that you ignore the signs: You don’t know what your credit card balances are, for example, or you just don’t open statements.

Your subconscious usually tells you when you’re in a danger zone, says Beverly Harzog, author of “The Debt Escape Plan.” It may whisper at first, with headaches or sleepless nights. Other times it hollers. You can’t stretch your paycheque to cover all your bills, or you avoid money discussions with your partner.

But facing your debt is the first step toward mastering it.


Indicators that your debt is a problem:

—Your credit card balances keep rising. It’s best to pay credit cards in full every month. Next best is paying enough to whittle down balances over time. If your balances are growing, your financial worries are, too.

—At least one credit card is maxed out. There’s one exception: Don’t count a balance-transfer card you’re using for debt consolidation — provided you have a plan to pay it off while the interest rate is in the low introductory period.

—You can’t pay more than the minimums on your credit cards.

—You can’t afford to save for an emergency fund. Emergencies happen, so you need at least a small reserve to cover them. If a car repair would mean you couldn’t cover your regular bills, something needs to change.

—You’re late on bills because you didn’t have enough money on the due date.

—You applied for credit and were rejected. That means creditors or card issuers see reason to believe you can’t or won’t repay money you borrow.

—You’re getting offers for credit cards for people with damaged credit — and you thought you had good or excellent credit. That’s a sign that something is tanking your credit, Harzog says.

If any of these apply, it’s time to take an honest inventory of your debt.

“I remember having a lot of headaches . even nausea when I sat down and faced the music,” Harzog says. But she went on to wipe out more than $20,000 in debt in two years.


Simply checking for these warning signs means you’ve taken the first step. If one or more apply to you, keep moving along this path to turn your situation around.

Take inventory: First, make a list of every debt you have, along with the interest rate and minimum payment. Then, list your income and expenses for each month to assess your financial obligations.

Cut ruthlessly: Find where you can trim expenses. Any extra money you can put toward debt payments will get you debt-free that much faster.

Do the math: Going all in, can you successfully pay off this debt? If it’s more than 50 per cent of your income, bankruptcy may be a more reasonable path to re-establish at least modest financial health. Schedule a free consultation with a bankruptcy attorney and a non-profit credit counsellor for assistance.

Pick a plan: If a do-it-yourself approach is within reach, choose a repayment method you’ll actually use. Two popular ones:

— Debt avalanche: Focus all extra payments on the debt with the highest interest rate until it’s paid, then move on to the next highest. This can save you money by wiping out your costliest debt first.

— Debt snowball: Start with your smallest balance and work up to the largest. The early victories can keep you motivated.

You can combine any payoff strategy with debt consolidation , which rolls several credit card balances into one debt at a lower interest rate. If you qualify for a balance transfer card or personal loan, it could help you pay off the debt sooner and for less money overall.

Track your progress and celebrate milestones: Rewarding yourself can help you stay motivated to pay down the debt, but don’t go overboard. Think picnic in the park rather than five-star restaurant meal.

Just Posted

Construction underway at Medicine River Wildlife Centre in Red Deer

The new building is twice the size of the old one

Fish for free

No license is required to ice fish on Family Day weekend

Music industry struggles to shake ugly legacy of sex, drugs and rock ‘n’ roll

TORONTO — Allegations of sexual misconduct swirling around pop-rockers Hedley have put… Continue reading

WATCH: Red Deer rings in the Chinese New Year

A couple hundred fill Festival Holiday to ring in the Year of the Dog

WATCH: From humble beginnings Red Deer-based wrestling promotion is growing

It wasn’t that long ago that Dylon Featherstone and the Canadian Wrestling… Continue reading

WATCH Replay Red Deer Feb. 18: Your weekly news highlights

Watch news from Red Deer and Central Alberta

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Life or death main decision for school shooting suspect

FORT LAUDERDALE, Fla. — The evidence against the Florida school shooting suspect… Continue reading

Man who stole millions from Seabird Island band sentenced to 4.5 years jail

Stephen MacKinnon sentenced in Chilliwack court for stealing $2.3 million over eight years

Vancouver artist’s cartoon of Florida school shooting resonates

Cartoon shows football coach, one of the victims, meeting others killed in school shootings

B.C. man brings dog to court as ‘best witness’

Man is defending himself on charges of uttering threats, possessing weapon for dangerous purposes

WATCH: Polar dippers brave icy water to raise money for Sylvan Lake charities

The water may have been cold, but the amount of money raised… Continue reading

WATCH: Cat yoga — the purr-fect de-stresser, says Red Deer-area cafe owner

Felines and humans stretch together each month at Alley Cat Cafe

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month