Debt is a serious problem and millions of people are battling debt every day. Although a loan or borrowed money can work as a quick fix for pressing financial needs, it however can become a burden when it accumulates and you find it difficult to pay back. As you’re probably aware, many people find themselves in a continuous financial down-spiral but fortunately here are 7 signs you have a debt problem so you can avoid this financial crater yourself!
Sign #1: You have no savings
The first sign that you have a debt problem is that you have no savings. Only a few people have enough money saved against emergencies, or to use to invest. The sad reality is that many people do not have any amount as savings and many others do not save enough. Both are potential signs that you have a debt problem because it is those debt repayments that are hindering your ability to save. And as you probably know, without saving enough money, you will still be in a serious financial challenge. Some people think that if they can make enough money every month then they can spend as they please and don’t need to save. But this is wrong because emergencies can arise when you have no savings and having no savings means you will have nothing to fall back on which can actually lead you to taking on more debt.
During emergencies, people without savings find it difficult to cope. For example, someone who lost their job without savings will still need money to survive. It becomes difficult for them because they are not being paid anymore. The next thing they would usually do is to look for means to borrow money. However, since they are no longer working, it may become difficult for them to pay back the money that they borrowed. This is how debt begins to accumulate gradually until it becomes a serious problem.
When you have no savings, it is a sign that you are not properly managing your finance. To overcome this debt problem, you have to create a plan that will help you avoid further debt and repay the one that you owe. It is usually advised that you need to have about 3 to 6 months of your monthly expenses saved for an emergency. Therefore, if you are reading this right now and you have no savings, make it a habit to start saving immediately.