How to Tell When Your Debt is Out Of ControlNov 07, 2018
Personal debt is a real concern for many Canadians, young and old. In fact, whether you’re a millennial or Gen Xer, a boomer or a senior, almost half of all Canadians admit that their current income is not enough to allow them to live debt free. And just about three-quarters told us they carry some form of personal debt.
Those are just a few of the most concerning stats from our recent Affordability Index survey. Given the prevalence of debt across the generations, it’s important for all age demographics to know when their personal debt has become a problem.
Here are a few debt warning signs to watch out for:
You find it hard to make payments
Difficulty making your regular payments could be a sign that your debt has become problematic. Consider whether any of the following situations apply to you:
- You can only make the minimum payment required.
- You are frequently paying your bills after they are due.
- You are skipping payments on some bills in order to pay others.
You look for other ways to pay
Although you may still be making your regular payments, looking for other ways to make these payments is another sign that your debt is a problem. Relying on the following methods of payment, for example, suggests that you may be struggling with the amount of debt you carry:
- You’re using one credit card to make another payment.
- You’re asking friends or family for a loan in order to make a payment.
- You’re resorting to cash advances or payday loans.
You’ve put your other financial priorities on hold
If you feel that your other financial priorities are being eclipsed by your personal debt, it’s a good idea to focus on finding debt relief. As you pay down your debt, you’ll be making space in your budget for other financial goals. Think about the following list. Have you neglected any of the following as a result of your personal debt?
- Saving for retirement
- Starting or adding to an emergency savings fund
- Buying your first home
- Saving money for other goals that might be important to you, such as home renovations or a vacation
You feel overwhelmed or constantly stressed about your debt
Personal debt may cause stress from time to time, but constantly feeling stressed-out, anxious or overwhelmed by the amount of debt you owe is definitely a warning sign. Our survey found that about one-in-four Canadians are so overwhelmed by their debt they don’t know what to do. That number jumps to 34 per cent for millennials and Canadians with children at home.
Remember that identifying that your debt is a problem is the first step towards finding debt relief. It’s also important to know that there are resources, tools and help available to you.
Creating a plan to pay down your debt can start with learning more about the debt options and solutions available. The Government of Canada’s website has many resources available to all Canadians focused on managing and dealing with debt and making wise financial decisions.