Yep, we use cookies for security purposes and to improve your website experience. Who doesn’t right? By continuing to use the site, you agree to the use of cookies as described on our Privacy page. You can reject cookies by changing your browser settings.

Privacy policy

6 signs that you have a debt problem - and what to do

May 3,2021

Author: Martha Harbell

Do you have debt? That’s OK - for many of us, dealing with some debt is just a part of life. We add it to our monthly budget and pay it off a little at a time. No big deal, right?

Except sometimes, debt can become a big deal - especially if it gets out of control and starts to impact your finances and stress you out. So how do you know whether or not your debt is a problem?

Here are six warning signs to watch out for, as well as tips for solving your debt problem.

1. You don’t know what you owe

If you don’t know exactly how much debt you have, how can you make a plan to pay it off? Make sure you know your total debt amount and check it on a regular basis so you know whether or not your plan to decrease your debt is working. Otherwise, it’s easy for debt to get out of control.

2. Your debt is going up

Well-managed debt decreases over time - it shouldn’t go up every month. Sure, maybe you have an unexpected expense and you have to skip your regular debt payment one month - that’s OK, life happens and you can get back on track. But if your debt is going up and up, you need a new plan for how to manage it.

3. You can’t afford your everyday expenses

If your debt payments are so big that you can’t afford to pay bills or buy groceries, it’s time to re-evaluate. The last thing you want to do is use up your savings paying for daily expenses.

4. You’re taking out more credit and loans

Getting into more debt to pay off the debt you already have is a no-win scenario when it comes to your finances - and your credit score. Some debt management strategies involve consolidating debt with a low-interest loan, but we recommend talking to an expert before taking that step.

5. You’re losing sleep to debt worries

Debt is one of the leading causes of stress for Canadians. If you’re so worried about your debt that you can’t sleep or focus, it can negatively impact your mental and physical health, your job, your family, and your relationships.

We recommend talking to a financial advisor about your debt. They can help you make a plan to manage your debt and reduce your stress.

6. You’re hiding your financial situation from friends and family

We’re firm advocates of open and honest conversations about money. Still, we understand that for many people, talking about money problems can feel embarrassing, even taboo. If your debt is having such a big impact on your life that you find yourself hiding things from your family and friends, that’s a clear sign that your debt’s become a problem.


How to start solving your debt problems

If any of these warning signs sounded familiar, it’s likely that you have a debt problem. That’s OK! While there might not be a magic solution, there are several things you can start doing right now to better manage your debt. Here are five tips.

1. Add up your debt

Make a list of all the debt you have. Once you’re confident that you know exactly how much you owe, it’s easier to make a plan for paying it off.

2. Make a budget

Regular debt payments should be part of your monthly expenses. If you don’t have a budget, you can’t know how those payments will fit into your current spending and saving habits. The good news is that making a budget is simple - it’s essentially a list of all your expenses that you can examine to find opportunities for saving.

3. Pay off high-interest debt first

When you’re trying to decide which debts to pay off, start with anything high-interest. Paying off high-interest debt, like credit card balances, will reduce the amount you owe and the amount of interest you’re paying more quickly than starting with lower-interest debt.

4. Stay on track

Make your payments on time, as often as possible. Add alerts to your calendar or set up automatic payments so you can avoid late fees and higher interest. It’s not the end of the world if you miss a payment, but try to get back on track as soon as possible.

5. Get expert advice

Ask for help! Credit counseling service have advisors who are experts in helping you manage and reduce your debt.


Learn more about managing your money

Learn how to budget in 6 steps
8 tips on managing your money during a crisis
7 money rules you didn't learn in school