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Ten warning signs that you have too much debt

Ten warning signs that you have too much debt (Getty)
Are you swimming in debt? Or even drowning in it? You're not alone. Thousands of New Zealanders have the feeling they are sinking financially.

Using debt occasionally to spread out large or unforeseen expenses is okay but being in debt all the time isn't. If you can't even meet the minimum payments it's time for action.

There are some real warning signs that indicate you've got too much debt and that it's likely to all end in tears. If two or more of the red flags below apply to you then face up to the fact: you have too much debt.

Do these red flags sound like you?

1. You spend up to the maximum of your overdraft every month and view this as your money, not debt. Our society normalises debt. Overdrafts, credit cards and hire-purchase should be there for emergencies, not used as a day-to-day way of getting cash that you can't afford.

2. You get charged dishonour (or honour) fees most months. These fees add up quickly and help your debt spiral out of control. At the very least you need to reorganise your accounts and spending to avoid fees.

3. You have had credit denied — thanks to your poor credit record. If banks or lenders refuse you credit it's a real red flag that something is wrong with your finances. Sit up and take notice.

4. You lie to loved ones about your spending and debt. Lies can bring an apparently good relationship to an end quickly.

5. You use cash advances on your credit card when you run out of money. Cash advances are incredibly expensive and if you use them, there is something wrong with the way you manage money.

6. You are late paying rent and other bills such as utilities and credit cards. If you receive overdue reminders, this is you.

7. You don't know exactly how much you are in debt. Denial is common with serial debtors. Tot your debt up today and then you can start working out how to start reducing your debt mountain.

8. You don't open letters or answer phone calls because you're scared they will be from creditors. Debt counsellors see this every day. It's a classic symptom and is a real red flag that something needs to change.

9. You worry about your bills and lose sleep or use alcohol or drugs to mask your anxiety. Worry and anxiety are not good for your overall wellbeing. Alcohol and drugs can just make your problems worse in the long term.

10. You don't have any savings at all. We all need some savings — even if it's just an emergency fund to tide you over if you lose your job. If debt is getting in the way of this, you've got a problem.

If you have too much debt then it's time for drastic action. It's no use thinking that the problem will go away. Your life needs to change. Now.

If your attempts to change in the past haven't worked then see a debt counsellor. Every town in New Zealand has one — and they're free to visit. Look up "Budget Advice Services" in your local White Pages, or visit Family Budgeting.

Don't, however, think these counsellors have a wand that is going to magic away your problems. It's going to require hard work on your part.

You could also enlist the help of a buddy or mentor to work with you. That's someone you know who is good with money themselves and you feel comfortable sharing your problems with.

Your say: What are your get-out-of-debt tips?

Read more about debt

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