However, if you live in an area where rents or food costs are high, or have major medical bills, less of your disposable income is available to pay off bills that are non-essential. How debt affects the rest of your life will also help you determine what is too much. Think about what you want out of life, what you enjoy doing and what gives you satisfaction. Then think about where your money is going. If you are unable to do things you want because of paying old bills or if you spend time worrying about having enough money to meet expenses, it may be time to develop a debt reduction plan.
Counselors say consumers tend to overestimate the seriousness of their financial problems.
Determine all sources of income now and for the next few months. Face up to how much you owe and the cost of monthly payments. Quit charging and apply extra cash to reducing balances. Track spending, balances and minimum payments due. Watch debts melt.