How Do You Know If You’re In Too Much Debt?

How Do You Know If You Are In Too Much Debt? 5 Signs | CIO Women Magazine

Using debt is normal in today’s economy. People leverage it all the time to make payments and avoid spending from their checking accounts. 

But how do you know if you are in too much debt? Where’s the ceiling? 

That’s what we ask in this post. We look at some situations where you’re probably in too much debt and should work to get out of it as soon as possible. 

Here are five signs that you are in too much debt:

1. Your monthly debt obligations are less than 36% of your income

One metric that’s helpful when trying to work out whether you are in too much debt is your monthly debt-to-income (DTI) ratio. The higher this number is, the more challenging it becomes to pay off your debts. 

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Most money experts recommend keeping your DTI below 36%. It can go slightly above this, but if you’re paying more than 43% of your income to creditors every month, it could be cause for concern. 

You can check your DTI by using online calculators or dividing your debt payments by your income and multiplying by 100. 

2. You can only afford the minimum monthly payments

Another sign you might be taking on too much debt is if you can only afford the minimum monthly payments on your cards and loans. If paying a little extra leaves you with nothing left at the end of the month, it could be a sign you’re spending too much or can’t meet your debt obligations. 

Usually, banks and creditors will offer services to help you pay your loans. However, these may affect your credit score, even if you don’t use them. 

3. You’re being investigated

Being investigated is also a sign you are in too much debt. Creditors will sometimes do background checks and probe your finances if you miss a couple of payments in a row. 

If you think you might be in this position, it’s a good idea to learn how to check if you are under debt review. Finding out whether anyone is delving into your financial situation can give you an early warning. 

4. You can’t save for emergencies

Another sign of a serious debt issue is the fact that you can’t save for emergencies or necessary expenses (such as car servicing). Ideally, you should have a little bit of money left at the end of every month to ensure you remain solvent during challenging times. If you don’t, it could mean you’re spending too much on repayments on your loans and mortgages. 

This also applies if you aren’t saving for retirement. Loan repayments can eat into your savings fund. 

5. You feel stressed all the time

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Feeling stressed all the time is another sign you might be in too much debt. You are anxious because you can’t see how you’re going to repay your loans. 


If you think you are in too much debt, get help. Professionals can assist you in taking back control of your finances and becoming solvent again. Sometimes, you can roll your debt up into a monthly payment, making it more manageable. Just focus on getting back to a healthy place financially and see how much better you’ll feel. 



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