| Debt Danger Signals |
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Warning signs of overindebtedness
come long before the collection
notices from creditors. The
following questions will help
you assess if you are managing
credit and debt appropriately.
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Yes |
No |
| 1. Are you borrowing to pay for items you once paid for with cash? |
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| 2. Is an increasing percentage of your income going to pay debts? |
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| 3. Are you making payments with money reserved for something else? |
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| 4. Are you taking money from your savings to pay current expenses? |
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| 5. Is your emergency fund (which should equal 3 to 6 months of basic living expenses)
inadequate or nonexistent? |
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| 6. Do you pay only minimums on your revolving charge accounts? |
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| 7. Are you making payments in 60 to 90 days that you once made in 30? |
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| 8. Are you near or at the limit on your credit cards and other sources
of borrowing? |
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| 9. Do you take out a new loan before the old one is paid in full or take
out a new one to pay an existing one? |
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| 10. Do you take out payday loans before you receive your scheduled pay? |
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| 11. Are you unsure about how much you owe? |
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| 12. Are you chronically late in paying your expenses? |
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| 13. Are you threatened with repossession of your vehicle, cancellation
of your credit cards or other legal action? |
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| If You Answered: |
You Are: |
You Should: |
| "No" to all questions |
Managing credit and debt well. |
Continue practicing good money management. |
| "Yes" to any question 1 to 5 |
Getting out of control. |
Stop using credit cards until current debt balances
are paid. |
| "Yes" to any question 6 to 11 |
On the verge of trouble. |
Stop using credit cards. Develop a budget and debt
payment plan. |
| "Yes" to question 12 or 13 |
Probably overextended. |
Consult a financial planning professional now,
before your financial goals become impossible to achieve. |
Basic Money Management
Basic Money Management
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