5 Warning Signs that You Might Have Too Much Debt by Kevin Sun Not sure how much debt is too much and worried you might be in trouble? Many Canadians have the same concern. After all, unlike your vehicle\u2019s fuel gauge or home smoke detector, there\u2019s no convenient device that will tell you when you need debt relief. While banks have a debt load formula based on your debt to income ratio, it\u2019s very possible for them to approve you for more credit than you might actually be able to afford. Here are 5 warning signs that you might have a debt problem and what you can do instead:Relying Too Much on Credit: 1st Warning Sign Relying too much on credit is one of the surest signs that you have too much debt. But what does this actually mean? It\u2019s not as simple as looking at how much money you owe or how many credit cards you have. Relying too much on credit means that you can\u2019t afford your routine expenses with the money you bring in each month. Here\u2019s how to see where you stand. Imagine that tomorrow, you can no longer buy anything on credit. If you\u2019re already making payments on a house, student loan, or car, then those are fine, but you can\u2019t use any credit cards or lines of credit at all. What amount of time could you last doing this? A week? A month?If you think you can last a month, put that confidence to the test and stop using credit for 30 days. This means that whether you\u2019re buying groceries, clothes, or anything else, you\u2019re only using money in your chequing account and cash in your wallet. Now, this definitely won\u2019t be convenient, especially for products and services like subscriptions or your phone bill. So what can you do instead of relying too much on credit? Whenever there\u2019s a payment you just have to make with a credit card, repay it on the same day through online banking. If that\u2019s not practical, put the payment amount into an envelope or savings account and don\u2019t touch it until the 30 days are up. If you find yourself struggling to buy things you usually get without a second thought, then you might be relying too much on credit in your daily life. Easy Ways to Clean Up Your FinancesOnly Making Minimum Credit Card Payments: 2nd Warning Sign Making only minimum credit card payments is a trap that many Canadians unfortunately fall into After all, you\u2019re still making the monthly payments that your creditors require, and you might still have a good credit score. However, behind this illusion of stability is an ever-widening chasm of progressive risk. Why are minimum payments a problem? Making only minimum payments means you\u2019re just keeping up but not getting ahead or paying the debt down in any significant way. The interest you pay eats into the money you have to spend, which might then cause you to use more credit to make up for it. This new credit will have its own interest, continuing the cycle. Before you know it, your balance might become so high that you can no longer afford even the minimum payments, and those are just the tip of the debt iceberg. This is a red flag showing you need help as soon as possible, especially if you\u2019re using other forms of credit \u2013 like a high-interest payday loan, or cash advance \u2013 to pay off debt you already have. So what can you do instead of making only minimum payments? It\u2019s crucial to bring your spending down. If you\u2019re getting close to this debt cliff, get help right away. You\u2019ll have more debt relief options if you do, plus you\u2019ll sleep better knowing you\u2019ve got a plan. Not Using a Budget: 3rd Warning Sign Those who don\u2019t plan what to do with their pay cheques often simply aren\u2019t sure how to budget money. Does this sound like you too? It\u2019s true that some people do just fine without ever thinking about budgeting. Others manage with an alternative way of budgeting where they just keep a list of what they\u2019re spending versus keeping track of their back account by memory. However, most people who have debt problems can see a real and immediate improvement to their financial situation as soon as they make and follow a budget. Why is not using a budget a problem? Many people feel overwhelmed at the thought of creating and then following a budget. They don\u2019t like having to keep track of what they\u2019re spending. This can feel stressful, but ignoring expenses won\u2019t make them go away. It will just make it harder to get your finances back on track. All a budget really does is help you stick to the choices you make ahead of time for how you want to use your money. In the end, having a plan and following through with it will do more for you than any financial program out there. The best debt help organizations will also provide budgeting help. If you need that extra push and expertise to make a budget that works for you, then we\u2019re happy to help you with that. Interactive Budgeting GuideNo Savings for a Financial Emergency: 4th Warning Sign If there\u2019s one thing that the last few years have shown us, it\u2019s that anything can happen at any time and that having savings for a financial emergency is crucial. Being prepared for unexpected expenses is one of the world\u2019s best debt solutions because when an emergency does happen, you won\u2019t need to get into debt for it at all. Yet when you\u2019re already struggling with debt, only affording minimum payments, or not following a budget, it\u2019s hard to put money aside for that inevitable rainy day. However, savings is one of your most important expenses when you outline your budget. It\u2019s nearly impossible to get out of debt without it. If you can\u2019t build up any savings at all, then how much debt you have might be worse than you realize. The longer you wait to get professional credit counselling help, the more time you\u2019ll spend being financially vulnerable to the unexpected. Should I Pay Off Debt or Save Money? Being Worried About How Much Debt You Have: 5th Warning Sign If you\u2019re thinking about how much debt you have, and wondering if it\u2019s too much, you likely have a problem. When it comes to your financial health, there\u2019s no such thing as being too careful. The fact that you\u2019re worrying about debt and have read this far means that it\u2019s worth taking the time and effort to figure out how to pay down your debts and get back on track. The fix? Debt is a symptom, so it\u2019s important to go deeper and identify the reasons why you\u2019re in debt. Until you know what\u2019s causing your debt problem, you won\u2019t be able to explore possible solutions. No one knows your situation better than you do, so if your gut says you might need to make a change, then listen to it. We know that taking the first step to deal with your debts can feel like a big obstacle to overcome. Yet by taking that step, you\u2019ll start on the path to a better financial future for yourself and your family.How to Find Debt Help Options When You Think You Have Too Much Debt If any of the warning signs make you think that you have too much debt, start your journey towards overcoming debt by speaking with one of our friendly credit counsellors. A professional counsellor can help you review your financial situation and explore debt help options so that you can decide on the solution which works best for you. As a non-profit organization, we are dedicated to helping Canadians achieve financial wellbeing. Our work is backed by reviews as well as national and international accreditations. Appointments are also free and confidential. Take your first step towards getting rid of your debts today by calling us at 1-888-527-8999, sending us a quick email, or asking us a question anonymously online.