Four Danger Signs of Debt

Pay your credit card total each month and avoid interest charges.

Pay your credit card total each month and avoid interest charges.

You can always find a place to spend your money. If you’re waiting for payday, you have company. In 2011, 42 percent of workers were living from paycheck to paycheck, according to a Career Builders survey. If you make it from one payday to the next, you’re covering the bills but you may be uncovering the danger signs of debt.

Making Minimum Payments

Making minimum payments on credit cards is a danger sign. Credit card companies determine minimum payments based on the total amount you owe. As you make payments, your minimum payment decreases but the interest continues to accrue. If you pay only the minimum each month, you’ll pay much far more than the original amount you charged and the added interest will assure years of payments. If you’re making minimum payments by choice and not because of necessity, increase your payments and get your credit card debt off your list of danger signs.

Squabbling About Debts

If discussions of monthly bills become arguments, you’re showing your financial stress level with this danger sign, according to Florida International University. You two may not have the same philosophy about handling money or one of you may be spending more than is comfortable to the other. You can fix this danger sign with communication and cooperation. If you’re the spender, learn to save with the same thrill you get from spending. If you’re the saver, help your spouse see the virtues of a financial cushion and planning for the future together.

Unknown Totals

Losing track of your total indebtedness is a warning of trouble brewing, notes Consumer Credit of America. Keep calculations handy so you know your total debt at the end of each month.

Withdrawing Retirement Funds

When you withdraw money from your savings or retirement accounts, you’re going the wrong way to protect your financial future. You’re losing ground -- spending more money than you make and not keeping up with saving regularly. Using savings to pay expenses or bills is a warning for you to cut your expenses to live within your current income.

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