Debt is one of those words no one likes to hear. According to Investopedia debt can be defined as, “an amount of money borrowed by one party from another. Debt is used by many corporations and individuals as a method of making large purchases that they could not afford under normal circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest.”
There are also different kinds of debt. You can have loans with the bank, a mortgage, student loans, car loans, a line of credit, credit card debt, a payday or short term loan, the list goes on. But do you know how much you owe and to where? As much as debt is common, there is a difference between paying down your debt and accumulating it. That’s why we lay out some of the key indicators of what can be factors in having too much debt.
You Worry About Your Credit Card Being Declined
Have you ever been concerned about swiping your card and it being declined? This is never a good feeling and one of those things you shouldn’t have to worry about. Maxing out your credit cards is never a good thing since the interest you pay on credit card charges is one of the highest out there. Being stuck in the credit card cycle can have an impact on your credit score causing future financial implications and is one way to know if you’re in too much debt.
What Savings Account?
If you were to look right now, how much do you have in your savings account? Depending on the answer, you may have to revaluate your spending habits. As we’ve mentioned, it should not be about what you’re spending but what you’re saving and savings can make a huge impact on the kind of debt you’re carrying and of course, help you get out of it.
The Money Moving Game
Are you playing the money moving game? Paying off one thing and moving money from on account to another to cover the next bill? Are you borrowing money to pay off something else? This happens more often than you would think and it is in crunch times like this that GoDay is here to help you bridge the gap. But pay attention to how often you have to do this because this should be setting off those financial alarm bells.
How Much Is Left At The End Of The Month?
When all bills and incidentals are covered off at the end of the month, how much is left over for savings, investments or your emergency fund? Have you worked these things into that monthly budget or are you strapped for cash every month after everything is said and done? If you’re only scrapping by it may be time to readjust your spending habits and see where more savings can come into play so you don’t have to be as financially strained each month.
Are you worrying about your debt? Talk to one of our customer service representatives about how we can help you today.