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Are you living in a vicious cycle of paying debt and borrowing again for survival? If so, you’re among the many Americans that are drowning in debt. Since the economy turned ugly, people lost their jobs and those with debt sunk. Others were forced into insolvency and foreclosure for an inability to meet their financial obligations.

 Being in debt is nothing new; neither is it wrong to be in debt. It's the means through which many people can buy homes and cars and send their children to school. However, too much debt can become problematic and incapacitate you. Before it spirals out of control, check if you have these warning signs.

 Large Minimum Monthly Payments

When you have debts scattered all over, it's essential to add them up. This way, you'll establish how much of your income goes towards debt repayment each month. Write down your monthly take-home income and calculate 20%. Add up your monthly debt repayments and compare it to the 20% of your income.

 Based on this comparison, you can make a decision. If the total value of your debts is the same or higher than the 20% figure, your debts are too high. If the figure is lower than the 20%, consider allocating more money towards debt repayment.

 Ideally, the money that goes towards your debt shouldn’t be more than 15-20% of your income. Beyond this threshold, you put yourself at risk of not having enough money for your basic necessities.

 You Only Make Minimum Payments

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You may not know this, but minimum payments on loans are designed to keep you in debt longer. The lower the minimum charge is, the longer you revolve your debt from month to month. Regardless of the level of debt, if you’re stuck at the minimum repayment, there’s a problem.

 For large debts, it’s advisable to pay as much as you can over the minimum every month. Set up automatic payments to avoid missing the payment dates. Take a step further by setting aside more money to clear that debt faster. If the minimum payments are all you can afford, for now, you need to reconsider your income levels.

 You Borrow to Pay Your Bills

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If after payday you still can't pay bills or buy food in your house, you're deep into debt. The worst way to get cash to sort bills is from your credit card as you're charged high interest. Additionally, you’ll also be slapped with a cash advance fee.

 With time, you'll run out of places to borrow money, and there'll be no choice but to face the balances. If this is where you are, start making plans to reduce expenses and boost your income sources. This way, you’ll live within your means without borrowing from friends, family, or creditors.

 Take Away

There's a whole range of warning signs to look out for to establish if you’re in bad debt. If you’re in one or more of the above situations, you need help. Get more insights on how to get out of debt from the DTSS U.S. Complete Freedom program. With time, you’ll know how to create a budget and stick by it.