10 Warning Signs of Financial Trouble

One of the biggest hurdles you might face before deciding to explore a debt relief program is acknowledging that there’s even a problem. Denial is a strong force that can keep you from making improvements to your financial situation. But you deserve that help. 

If you’re wondering if your finances (or those of someone you care about) could be in better shape, here are 10 financial warning signs to watch for.

1. You’re only paying the minimum amount on your credit cards (or less)

When you only make minimum payments on your credit cards, you’re technically fulfilling your obligation to your credit card companies. But you risk paying far more in interest than the items you purchased originally cost when you don’t pay more than your minimums each month. Plus, only paying your minimums puts you at risk of accumulating a large balance, which could cause damage to your credit score.

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2. You shuffle debt around from credit card to credit card

If you tend to move money around from one credit card to the next, you’re probably not making headway in paying off your debt. While balance transfer cards, if used properly, could help you reduce your debt, debt shuffling is not the same thing as paying down your balances. If you’re shuffling debt just to stay afloat, it’s a sign that you may need credit card debt relief.

3. You’re near the credit limit on each of your credit cards

When you have high credit card balances relative to your total credit limit, it decreases your purchasing power and lowers your credit score. Your credit card balances should be kept as low as possible, for the sake of your credit score and your wallet. Getting close to maxing out credit cards is one of the biggest financial warning signs to keep on your radar.

4. You charge more each month than you make in payments

If you’re charging more on your credit cards than you’re making in payments each month, it’s a clear financial warning sign, since it means you’re adding to your debt rather than getting ahead of it. It’s important to create a budget that helps you manage your spending so you’re able to make credit card payments on time and in full. A budget could help you identify expenses to cut back on so you’re able to start charging less and paying more of your existing balances.

5. You receive frequent phone calls or emails about delinquent bills

When your phone is ringing constantly with calls from creditors, or your inbox keeps blowing up with emails asking you to repay overdue debts, it’s a sign that you may be in over your head. Once you’ve gotten to this point, it may be time to seek out debt relief. Debt consolidation could be your best bet when you’re juggling multiple credit card balances and you don’t know which one to pay off first. 

6. You use credit cards because you don’t have money

There may be times when it becomes nearly impossible to avoid using your credit cards, like if you’ve lost your job or are dealing with a series of unexpected expenses. But one of the biggest financial warning signs is frequently using your credit cards in the place of having the money to pay your bills. 

If this keeps happening, it may be that you need to make some adjustments to your spending. And if you don’t have expenses you can reasonably or comfortably reduce, you can try boosting your income with a second job instead of getting deeper into credit card debt. 

7. You’re dipping into your savings to pay your monthly bills

If you have savings to fall back on, you’re in better shape than a lot of other people. But while it’s a good thing to have an emergency fund, that money should be reserved for unplanned expenses, like sudden home repairs or losing your job. If you’re regularly dipping into your savings to pay your regular monthly bills, consider it a financial warning sign and aim to make a change. That could mean reducing your spending or trying to boost your income with a side job.

8. You’re afraid to tell people about your debt

If you’re struggling with debt, you’re most likely in good company. You may even have friends, family members, or colleagues who are in a similar position. But if you’re too embarrassed to talk about your debt, you may be less likely to seek help for it. Instead, confide in the people you trust and see if anyone has recommendations for digging out of that hole. And don’t let a fear of being judged stop you from getting debt relief. There are professionals who handle situations like this all the time, and they’re happy to help.

9. You sign up for every credit card that sends you an offer

If your credit score is in decent shape, you may find yourself getting bombarded with credit card offers that look enticing. Some of these cards offer seemingly amazingly perks like large sign-up bonuses and extra cash back on everyday purchases. But you should know that each time you sign up for a new credit card, your credit gets pulled, which could damage your credit score. And the more credit cards you have and rely on, the more you risk adding to your debt. 

10. You worry constantly about your next paycheck 

Do you typically find yourself counting the days until your next paycheck arrives so you can cover your expenses? With help, you can stop living paycheck to paycheck and start managing your bills more comfortably. So if you don’t have a savings cushion to fall back on, and you can’t start building savings because your paycheck is monopolized by debt payments, don’t hesitate to explore your options for relief.

How to get out of financial trouble

If you’re struggling with debt, worried about falling behind on payments, or identifying with any of these other financial warning signs, it might be time to take the next step. Freedom Debt Relief can help you stop maxing out credit cards, living paycheck to paycheck, and worrying constantly about how to pay your bills. Our Certified Debt Consultants can help you determine how to chart a better financial future and walk you through your options for managing debt. Find out if you qualify so you can improve your financial picture as soon as possible.