Do You Have Too Much Debt?
Various rules of thumb exist to help determine when debt levels are excessive. The problem with rules of thumb, however, is they don’t take into account your unique circumstances. Look for these signs that your debt level may be getting too high:
You have no money left over at the end of the month.
If you have nothing left to save after paying your bills every month, your debt may be too high.
You’ve reached your maximum credit limit.
If you’ve maxed out your credit card limits or are considering obtaining new cards for additional credit, your debt may be getting out of hand.
You’re only making minimum payments.
Minimum payments on credit card debt are so low, it can take decades to pay off the debt.
You don’t have an emergency fund.
Ideally, you should set aside three to six months’ worth of living expenses in case of emergencies, such as a job loss or major home or car repair.