Although you may have an inkling that you have a debt problem, and may be familiar with the signs, you may not feel ready to take action.
Debt can become a vicious cycle of juggling repayments, late payment fees and shopping binges. Want to know if your finances are in trouble?
Sticking your head in the sand
Are you avoiding calls from private numbers? Or not opening letters from your credit provider? Are you avoiding anything that reminds you of your financial situation? If avoided for too long, it could catch up with you in the form of a bad credit listing, making it hard for you to get credit in the future. Since March 2014, providers can now report more frequently to your credit report for smaller matters such as late bill payments.
Do you have a handle on what interest rates you are paying and your account balances? Another sign you may have a debt problem is being vague about your account balances. It could even be compounding the issue if your card interest rate is high.
If you often receive final notices, late payment fees and disconnection notices, you may well have a debt problem. Avoiding discussing your situation with the providers will only make things worse. By discussing your situation with the provider before the due date you may be able to work out a payment plan to suit both parties without the added late payment fee.
Money, money, money
If your thoughts are filled with money, lack of it, bills to be paid and finding money to spend on essentials then this may be a sign you have a debt problem. Having a debt problem means living in a constant state of anxiety about money, and chasing your tail madly transferring money where it’s needed or out of an account before a direct debit goes through.
Living on hope and a prayer
Wishful thinking is a great pastime. Which you do a lot of if you have a debt problem. Such as, I hope my debit card isn’t declined (as it is swiped at the supermarket) or if I just won lotto I would be sorted (for this month).
People with a debt problem often use shopping as a way to avoid addressing their debt problem. By shopping up a storm before the bills are paid, not only compounds the problem but is also only a temporary distraction from the bigger picture.
If you’re hiding purchases after agreeing to a budget or misleading your partner about the extent of your debt this could indicate a debt problem. If you make a budget plan together, stick to it as best you can but more importantly, part of facing up to a debt problem is being open and honest about it from here on in.
Did any of these signs hit a raw nerve for you? Do you have a debt problem? See our posts on drowning in debt and simple ways to reduce credit card debt to get some ideas to start doing something about it.
If your needing help managing your debt please visit these resources:
- 6 Simple Ways to Reduce Credit Card Debt
- Services Australia (Government Site): Dealing with Debt
- ACCC: Help when your in Debt
- National Debt Helpline (Australia)
- Frugal Living