Signs that You Are Financially Over-Committed

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Do you find yourself rushing from the bank to pay off a payday loan after cashing your paycheck? If you do, don’t feel lonely. This has become so commonplace that you’ll find these ridiculously high-rate lenders on nearly every street corner.

While all too common, this practice is a sure sign that you’re in deep financial trouble. There are many other signs that you are financially over-committed. Among these are:

* Using your credit cards to pay for day-to-day necessities such as food and gasoline.

* Taking out a cash loan from one credit card to make the payment on another one or to pay other bills.

* Making the absolute minimum payments on your credit card bills.

* Falling behind in your payments to credit card companies and other lenders.

* Borrowing from friends or family just to get by until your next payday. Not only is this a sign of serious financial trouble, it can also put a strain on precious relationships.

* Taking out a second mortgage on your home to pay off other debts that have gotten out of hand.

* Refinancing your home to consolidate all of your debts into your regular mortgage payment.

* Finding yourself needing to take a loan from your 401K to pay off high interest loans and credit card bills. This is a serious mistake. It not only depletes your retirement fund but carries penalties and high taxes along with it.

* Having little or no savings to fall back on during an emergency or in the event of job loss.

If any or most of these ring true for you, then you need to get help right away. Beware though of any company that promises to contact your debtors to settle or reduce your payments. Far too many of these so-called debt reduction plans are nothing more than scams set up to prey on your desperation.

There are a number of things you can do to help your situation, starting immediately.

* Destroy your credit cards so that you won’t be tempted to use them again.

* Free up money to begin paying down your bills. Do away with all non-essentials such as movie rentals, cable television, and internet access (unless you work online).

* Pack your own healthy lunches and cook meals at home instead of eating out.

* Do away with expensive cell phone plans. People have survived for millennia without them and you can too.

One final recommendation is to invest in a copy of Dave Ramsey’s “Financial Peace.” You can find a copy in most bookstores. Thousands of people have brought themselves back from the brink of bankruptcy by following his proven, common sense advice.

Filed Under Finance & Credit Info 

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