This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
Do you fit the description?
Once you start climbing over the 40% range in debt, you’re walking straight into the red zone. At some point, you will hit a wall and fall flat on your face (e.g., bankruptcy, maxed out credit cards, or falling behind on your bills).
Are you currently sitting above 35% with debt? If so, it’s time to slow your wheels down, so you can catch yourself before it gets way out of control.
2. You’re behind on your bills.
You know something needs to change when you’re constantly trying to catch up on your bills. You’re either living above your means or mismanaging your money.
Trim down your expenses, increase your income, and find it much easier to stay afloat.
3. You’re looking for your next paycheck.
Can you wait between paychecks, or are you ready for the next three paychecks as soon as you get paid? Is enough ever enough, or do you always need more?
I knew someone who consistently asked people close to them for money between their paychecks because they were constantly overspending. They were also always treading the bankruptcy line. Getting more loans from friends and family will not save you. Only transformation in your financial habits will bring about the correct result.
Figure out a way to live within the number written on your paycheck so you don’t have to put yourself in a questionable financial situation.
4. Your credit cards are maxed out or always sitting close to it.
First off, your credit utilization should usually not be above 30%; 0%-10% is always best, though. There are cases where you can use credit card debt to your benefit (e.g., capital for a short-term investment), but most people don’t do this.
A credit limit does not mean you have to reach it. It’s always an option. However, many of us forget this and run into tricky financial situations. Credit cards are a trillion-dollar industry; companies know precisely what they’re doing to continue increasing the profit margins while getting more people chained to long-term debt repayments.
Instead of looking at your credit limit as the max amount of money you have access to, only count 10% of the max limit as usable, so you never find yourself in over your head with debt.
5. You have debt but no savings or investments.
If your debt is climbing, but your savings and investments aren’t, then you’re not on track financially.
This is a cut and dry way for you to face the music of where you are financially and what actions you need to take from here.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.