by Roisi Proven

Created on: May 10, 2010

The global recession is something that has hit everyone hard, but unfortunately it has affected some people worse than others. With almost half of American families spending more than they earn each year, and with an average credit card debt of $16,007 per household, it's hard to know when things have gone to far. However, there are several telltale signs that will indicate that you need to seriously reconsider your finances and get some form of help.

1. You are always in the red in your current account - You get to the end of the month and breathe a sigh of relief knowing that your next paycheck is just around the corner. Then, you look in your account and see that your balance is still in the red, despite your paycheck going in that morning. If you find yourself unable to reach that elusive positive balance, this is a sure sign that there is a problem. It means that you are living beyond your means and unless you start budgeting more strictly, a situation like this can swiftly spiral out of control.

2. You pay for essentials on your credit card - Credit cards are disturbingly easy to get approved for in the current climate, and it's easy to get into the habit of not thinking of them as "real" money. Most people use credit cards for luxuries or debt consolidation, but if you find yourself regularly using this instead of your current account card, it is a sign of problems. Every time you are using your credit card, you are accumulating more debt, and using it day to day means that you will soon no longer have the means to pay it back. If you can't pay for something in cash, try not to pay for it at all.

3. You only ever pay the minimum on loans and credit card - This is another false security that banks and lending companies have allowed us to get into. If you're paying the minimum, you're still paying off debt,right? Wrong. By paying the minimum, you are usually only covering the interest on your balance. This means that despite potentially paying hundreds of dollars a month on credit card and loan repayments, your debt isn't actually getting smaller.

4. You have to get a second loan to cover payments - This is one of the worst signs of having too much debt. The moment you need to get a loan just to cover repayments is the moment that you need to see a professional about reducing your debt. unless you are consolidating debts you should never have to have more than one loan at a time, as the monthly payments will be far harder to keep track of.

We must face the fact that most of us will end up in debt at some point in our lives. However, once that debt becomes unmanageable life will become much, much harder. How do I know that the above points are signs that you are in too much debt? Because they are the signs that I ignored until it was almost to late to regain my financial security and peace of mind. Don't make the same mistake, if you feel it mounting up, seek help now, don't wait just in case next month is better. Because, when it comes to debt, unless you make a change the only way is down.

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