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Telltale signs a person is overspending

South Carolina residents who do not have a large savings account are not alone. According to reports, nearly two-thirds of Americans have less than $1,000 put away, and one out of every three Americans have no money saved for their retirement. A major factor behind people's inability to save money is debt.

One sign people are carrying too much debt is if they are living from paycheck to paycheck. They may be spending more than they are earning, which means a sudden emergency could put them in huge financial difficulties. Another telltale sign of overspending is when people do not know where their money is going from month to month. Having a written budget that outlines their income and expenses will not only help people keep track of their money, it can also encourage them to consistently set aside a certain amount to add to their savings account.

When people are systematically making late payments on their credit card debts, this is a sign they are probably overspending. In fact, people who fall behind two months in their credit card payments are typically charged much higher annual percentage rates. For instance, a person with a $3,000 credit card balance and a 28 percent APR will pay an additional $403 in interest during one year.

People who struggle to make ends meet because they carry overwhelming debt might consider contacting a bankruptcy attorney for advice. The attorney may be able to negotiate with creditors to reorganize a client's outstanding debts or have part of an outstanding debt balance forgiven. If a debt settlement is not possible, an attorney may be able to help determine if Chapter 7 or Chapter 13 is suitable for a particular client.

Source: Wise Bread, "5 Signs It's Time to See a Credit Counselor", Damian Davila, Sept. 16, 2016

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