Being comfortable with debt can be a positive attribute when you manage it responsibly. Your comfort level will vary based on your individual financial circumstances, beliefs and goals but there are also red flags. Today’s post is meant to act as a mirror for you – to see if you are TOO comfortable with debt and not managing it effectively. 

1. High debt to income: Consistently carrying high levels of debt relative to your income or assets can be a red flag. This will look like maxing out credit cards, having high balances on personal loans or lines of credit, or carrying a large mortgage relative to income.
2. Making minimum payments: If you are only able to make minimum payments on your debts, especially high-interest debts like credit cards, you’re not effectively managing your debt. You are probably accruing significant interest over time that can quickly spiral out of control.
3. Using debt for basic expenses: Using debt, such as credit cards or personal loans, to cover basic living expenses like groceries, utilities, or rent, is a sign of financial distress and your inability to live within your means.
4. Ignoring savings: Prioritising debt payments over saving for the future like emergencies, retirement, or other financial goals is an indication that you lack a balance in financial planning. This could leave you vulnerable to unexpected expenses or changes in income.
5. Repeated borrowing: Continuously borrowing to pay off existing debts or using one form of debt to service another (like taking out a consolidation loan to pay credit card bills) can be a sign of a debt cycle that is difficult for you to break. This cycle will lead to escalating levels of debt.
6. No plan to pay off debt: If you don’t have a clear plan and timeline for paying off your debt, it indicates complacency or a lack of awareness about the long-term financial implications of carrying debt.
7. Stress or anxiety: Feeling stressed, anxious, or overwhelmed by debt payments are clear indications that you are not truly comfortable with your level of debt. This stress can impact your overall well-being.

If any of these signs are true for you, it is an indication that you need to make some immediate and profound adjustments. Carrying debt is not inherently a bad thing but being overwhelmed by it or if it’s keeping you from meeting your long-term financial goals, then you are no longer comfortable with debt but are being controlled by it.

Thanks for reading and remember, our story is far from over, let’s keep Enjoying the Journey!