How Do You Know You're in Debt?

By glblguy

See No Evil, Hear No Evil, Speak No Evil

Talking with some friends the other day, I came to realize that many people in debt aren’t even truly aware of it. How can this be? Modern society has somewhat changed the definition of debt or at the very least has managed to put itself into denial about about what debt truly is and means.

From wikipedia debt is:

Debt is that which is owed; usually referencing assets owed, but the term can cover other obligations.

I have spoken with a number of people who owe more than $30,000 on cars, owe more than 100% of their homes value on their mortgage and have credit card debt they don’t pay off monthly. The strange thing is when you ask these people if they are in debt, they struggle with the answer. They know they are, but have convinced themselves that the level of debt they have is normal and the people they feel are in debt owe way more than they do. This is called denial.

Here are a few signs that might indicate you are in debt and most likely in struggling:

  • You hide debt from your spouse or significant other
  • You carry a balance month to month on your credit card
  • You are living paycheck to paycheck and even using your credit card to carry you from one paycheck to the next.
  • You have bills and/or loan payments that are past due maybe by more than a month.
  • Collection agencies are calling you
  • Your net worth is negative
  • You lie awake at night wondering how you are going to pay the bills

If you answered yes to any of these questions, you have a debt problem. If you answered yes to more than one question, you might just have a serious debt problem.

Most people look for the easy or quick way out, but let’s face the facts:

  • Your long lost rich uncle isn’t going to die and leave you with millions
  • That eBay site you started isn’t going to make you millions in a couple of months
  • That stock tip your buddy at work gave you the other day won’t make you rich overnight
  • You won’t be able to call up your creditors and they’ll say “No problem Mr. glblguy, we just deleted all your debt. Thanks for calling.
  • You won’t find a treasure map while digging in your backyard garden that leads to untold riches.
  • Continuing to think the problem will get better next month won’t get you anywhere.

Here’s the bad news: Getting out of debt won’t be easy. To be honest, it will take time and persistence and frankly be very difficult. The good news is you can do it, many many people have.

To get out of debt you need to recognize the problem, form a plan, and then begin digging out of debt slowly but surely(or as I like to say, little by little). As you begin to make progress you will see the light at the end of the tunnel (and no it won’t be a train). You will start to feel more in control, more confident, and feel the weight begin to lift off of your shoulders.

Ready to start? Ready to change your life? Well don’t just sit there, start right now!!

Studies show that by writing something down you are 90% more likely to succeed. If you’ve decided to get out of debt, please comment below. Place your commitment in writing and share it with others. If you were in debt and are now debt free, share your story in the comments to encourage others! If you blog, feel free to post a link about your success story or commitment.


18 Responses (including trackbacks) to “How Do You Know You're in Debt?”

  1. Ashley U. Says:

    My husband and I have $37k in debt currently (not including our house). We started budgeting in May, and our lives have changed forever. We’re committed to paying off our debt by December 2008. We’ve paid off $10k since May, solely by getting intense about paying it off and working diligently.

    The sacrifice hasn’t been easy, but it’s worth it for the life that we have ahead of us. We’re Christians, and we’ve seen God do some amazing things in our lives by simply being more disciplined with what He has entrusted to us!

    Long time reader of your site – first time commenter!

  2. Karen Says:

    Love the monkeys !! Anyway, came to invite you to a blog party ! Bring anyone and everyone !

  3. Vivienne Quek Says:

    Read “The Richest Man in Babylon” and I thought taking 10% of income to pay off debt is a manageable solution.

  4. glblguy Says:

    @Ashley – Glad you commented! Guess I need a little bell or something to ring since you are a first time commenter ;-) Thanks for sharing your story. I think it’s great that you’ve set a target date and looks like you’re making great progress! I think you are well on your way. God likes stewardship, and when we’re good stewards with what he has given us, we are rewarded (Luke 16:10). Glad to have you as a reader, and keep us updated on how you are doing!

    @Karen – Thanks Karen! I’ll take a look this evening.

    @Vivienne – On my list to read. I am working through a book my Larry Burkett right now (see the bottom section of my sidebar for what I’m currently reading) and have The Richest Man in Babylon next on my list. Once I finish it, I’ll post a book review as well. Does the book recommend putting 10% towards you debt?

    Thanks for the suggestion and for the comment.

  5. plonkee Says:

    What do you do when you can’t sleep at night through fear that you won’t be able to pay your bills, even though you aren’t in (consumer) debt and you’ve got a healthy budget and savings cushion?

  6. glblguy Says:

    @plonkee – Hmmmmm…not sure. If you have a savings cushion, you’re living on less than you earn and still worry? Not really sure…I think you really need to think through what is causing you worry. The worry is the symptom, not the problem. If you can figure out the core problem the worry will go away.

    For the Christian though, the Bible says we shouldn’t worry (Matthew 6:27)

  7. George Says:

    Yep, it’s very hard for me to count my mortgage and car payments as debt, even though I know they are. Whenever my wife talks about us getting out of debt, it includes the car payments and not the mortgage. Whenever I talk about it, it only includes our credit card debt. In reality it should include both the car payments and mortgage payments.

    Nice post.

  8. glblguy Says:

    Hi George, you’re right car payments and houses are money owed and therefore debt. Thanks for the compliment on the article, I appreciate it.

  9. Pinyo Says:

    This is almost like the “red neck” joke, but much more informative. Good post!

  10. glblguy Says:

    @Pinyo – hey you’re right…Maybe that should be my new thing…

    You might be an in debt redneck if you porch falls down and shreds more than 2 credit cards

    You might be an in debt redneck if you have a John Deere credit card

    ok, ok, I’ll stop now…

  11. Erin Says:

    great article glblguy!
    We are on the road right now (literally) coming back from a vacation. Since my eyes have been opened about credit card and car debt I’ve done a complete 180 in my thinking about debt. but this past week while staying with family I’ve seen that my “debt free thinking” is NOT the norm. I’ve tried not to be pushy about it, but I did share a little about what my husband and I are doing in regards to getting out debt. But there were times I wanted to yell out that people don’t have to accept debt as a normal part of life; there are plenty of people that are debt free and paying for things with cash.

    What can you do though? Hopefully the example my husband and I make when we pay off our debt will help others.

  12. glblguy Says:

    Thanks Erin. Your dead-on about discussing it with other people. When I tell my goal is to be completely debt free they laugh and think I am joking! I’m sure you will set a good example for them to follow. Stay the course!

  13. Rich Says:

    I must be the worldÂ’s biggest sucker!

    For the third time in our seven year marriage, my wife has racked up multi-thousand dollar credit card debt behind my back. This third and most recent time amounted to 53K. More than the first two times combined! The rate on some of these cards is 31% and total minimum payments are more than my mortgage.

    It is the single most dehumanizing and frustrating experience to a) find out that your spouse has lied to you repeatedly about a spending issue you thought was behind you and b) your back in the hole again for the foreseeable future. Oh yeah, and let me add c) my credit rating is in the tank too. She took out two cards in both of our names that I was not aware of. I now spend my SaturdayÂ’s following up with collections agencies and negotiating payment plans.

    I wrote it off the first time this happened as just a mistake, the second time I almost left her but decided to work it out since she swore it wouldnÂ’t happen again, and now a third time. I regret staying because this time around we have a two year old child and this is the last thing we need.

    Here I go again, into the debts of Hell.

  14. glblguy Says:

    Rich, very sorry to hear that. Just can’t imagine how difficult that must be for you.

    I am of course not a financial counselor or marriage counselor, but two things 1) If she signed your name and you didn’t than you are not legally responsible for the debt. 2) Sounds like you guys might want to consider a counselor.

    Best of luck, my thoughts and prayers are with you.

  15. Make Friends, Earn Money Says:

    formulating a plan is always the key. It’s boring and hardwork but “if you aim at nothing you’re going to hit it” as my old Church Youth Leader used to say. P.S. I love the picture, great find

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