We live in an instant gratification society. Our forebears would have saved up to buy the things they wanted, but today’s ‘buy it now’ generation doesn’t want to wait for their new toys. Instead they take out personal loans or max out their credit cards to afford new cars, designer clothes or luxury holidays. There is nothing wrong with this mentality, but the problems usually come when the person’s personal circumstances change.
Personal loans and credit cards can be enormously useful tools. There will always be times when you need cash fast and you can’t wait until your end of year bonus hits your bank account. Used wisely, credit is a lifesaver (look at this website for the types of personal loans available to you), but if you borrow more than you can afford to repay, it won’t be long before you are struggling to keep your head above water. If this sounds like your current situation, here are five signs your debts are out of control.
1. You Live in Your Overdraft
Overdrafts are there to cushion you against unexpected expenses and bills. They are not designed to be a permanent extension of a bank account. Living in an overdraft is expensive. Banks charge fees to customers who are overdrawn, and if the overdraft is unauthorised, the fees can be astronomical. If your bank account is permanently overdrawn and you never get out of the red, you have a debt problem.
2. You Live Beyond Your Means
Impulsive spending on clothes, holidays, and things for the home only works if you have a very generous Trust Fund at your disposal. The rest of us have to budget in order to be able to afford the good things in life. Living beyond your means will soon lead to a debt problem, so stop and think about how much you spend and whether you can really afford that luxury holiday to Bali.
3. You Hide the Bills
E-Bills are more common than paper bills, but either way, ignoring Final Demands sent via email or through the post is not a good sign. Debt problems don’t go away, so burying your head in the sand won’t help.
4. You Receive Daily Calls from Debt Collection Agencies
Once a debt has been passed on to a debt collection agency, you can expect a lot of telephone calls. Pursuing debtors is a debt collection agency’s bread and butter. If you have one on your case, you need to tackle your debt problem.
5. You Can’t Sleep at Night
It is not unusual for people in serious debt to be depressed and anxious about their hopeless situation, which can lead to insomnia. Do you find it hard to sleep at night because you are so worried about paying the bills? If so, you need help.
There are several non-profit debt counselling services. These people are trained to help anyone who has a debt problem. They offer non-judgemental advice and will talk to your creditors on your behalf, so give them a call if you think you have a problem.