In Step #2 we have discerned between Good (Credit) and Bad (Debt). Why is debt bad? Well, it isn't always. Having a mortgage loan can be good. Normally, homes are an apreciating asset. Student loans can be good debt too. The more you know the more you make yourself an appreciating asset.
Step #3
Lets see if we can discern if you have a serious debt problem. Do you often panic about your debt? People with serious debt problems often panic and try to quickly solve a problem that has been with them for years. They will usually pay off the wrong kind of debt without taking a look at their complete financial picture. Most short time fixes won't make their debt problems disappear. To see if you have a serious debt problem look out the list below. If you can relate to at least three of these, you may have a serious debt problem.
1. You are always juggling payments or holding off paying one creditor to pay another.
2. You borrower or take cash advances to pay your creddit card debt.
3. You are consistently receiving past due notices on your accounts.
4. Charging more each month than you make in debt payments and have balances on several credit cards.
5. Always running out of money before payday and use your credit cards to tide you over.
6. Charging things like groceries or gas to survive.
7. Paying only the bare minimums on your credit cards or other debts.
8. You are not able to save anything for a rainy day.
9. Trying to find ways to get more credit because you are about to be maxed out on your other cards.
When I was in debt $60,000 eight years ago I could agree with each one of these statements. I knew I had a problem and immediatley after my divorce started working on stopping these toxic behavours. If you can answer yes to at leastthree of these it's time for you start working on your new life...your debt free life.
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