Posted: Contributor | April 24, 2014

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Six Signs You’re Heading for a Lifetime of Debt

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Almost everyone has debt, but few people manage it properly. If you're worried about your spending habits, you will want to take immediate measures to avoid heading into a lifetime of debt. Start sooner than later, and assess your financial situation to decide whether you could be heading for financial trouble. If any of these six signs sound familiar, it's vital that you change course now before your debt overwhelms you.

1. You Spend More Than You Make

Are you somehow managing to spend more than you make each month? If so, this means that you must be using your credit cards, lines of credit, or other loans in ways that you cannot afford. If you are living beyond your means, you are working your way deeper into debt each month, which at the end of the year can easily accumulate to a heap that is much more difficult to get out of! If this is the case, you should immediately cut back on your spending.

2. You Don't Have A Budget

If you don't have a planned monthly budget that details your expenses and income, you likely don't have any clue how much you are really spending. If you are unaware of what you are spending on a monthly basis in comparison to what you are earning, you won't have an idea of how much you should be saving, either. Without a planned budget, you are likely to overspend and under-save, and which can lead to a heap of debt in just a few months. Sit down and work out a monthly budget that shows exactly where your money goes.

3. Your Credit Cards Are Overextended

Are you credit cards maxed out? Are you paying the monthly minimum payments? Worse yet, are you skipping one credit card payment in order to make another? If you answered yes to these questions, you are likely relying on your credit cards much too heavily in order to be financially safe. Stop using your credit cards altogether and start working to pay them down.

4. You Use Credit To Pay Your Regular Expenses

Though using your credit card for things you don't need is something you should avoid doing, using credit in order to pay your basic expenses is a major indication of going into serious debt. Check your credit card bills - if you see basic expenses such as rent, groceries, and your vehicle expenses on them, take a close look at your spending habits.

5. You Have Past Due Accounts

Past due accounts and calls from credit collectors are obvious signs of financial distress. If your unpaid bills are a reflection of your inability to pay them, this is a serious sign of financial trouble. Call up your creditors immediately and start working out a payment plan.

6. You Don't Have A Back Up Plan

If you don't have an emergency fund, this could be an indication that you're headed for debt. Since credit should not be relied upon for emergency situations, you should always have something set aside for those "just in case" moments that life often throws us. Otherwise, when you find yourself in these inevitable situations, you will have no choice but to rack up more debt getting out of a tight spot. Open a new savings account dedicated solely for emergencies, and start building a balance.

Most people today do have some debt, but those who don't manage it properly are in for a lifetime of financial problems. Debt can quickly get out of control if you're not monitoring it. Pay attention for these signs, and if you notice any of them in your own life, contact a financial advisor. A debt and finances expert will be able to help you work out affordable payments and find areas where you can cut your spending - which can help you get out of debt.

If you're sick and tired of falling deeper and deeper into debt, and you're looking for help, check out some of the debt relief companies we've reviewed. We think they can help.

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