Debt Consolidation with Money Matchmaker®

10 Warning Signs That You're Swimming in Debt

Written by

Shaun McGowan

“How did you go bankrupt?” “Two ways,” Mike said. “Gradually, then suddenly.”

This pivotal line from Ernest Hemingway’s 1926 novel, The Sun Also Rises, provides a sobering reminder that many of us still refuse to acknowledge debt until solutions are no longer an option.

The latest release on household income and wealth by the ABS shows that 73% of households were in debt at the time of the figures, no doubt forcing many in a post-COVID world to become part of ‘The Cost Generation’.

Here are 10 warning signs of debt, and the steps you can take to become debt-free.

10. You never save money

If you notice a pattern in your income and spending that results in zero savings, it’s only a matter of time before ‘Gradually’ becomes ‘Suddenly’.

If there’s one thing we learned in the previous two years, it’s that even a small emergency savings fund can provide a level of security that still eludes many Australians.

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9. You live in fear of debt collectors

Feel a cold sweat on your neck when you see your phone ring with an UNKNOWN number flashing, shakily checking your voicemail afterwards with fearful hesitation?

If you’re living in fear of debt collectors, screening calls, or “losing” collection letters or emails, this can be a sign of an increasing debt concern

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8. You don’t know how much you owe

In our Budget Planner Spreadsheet, one of the first things we discuss is that the brutal reality of income and debt can be, well, brutal.

Interestingly, we found that the majority of people who were already aware of their total debts were more comfortable in creating a budget plan than those who were afraid to discover the truth.

You cannot hide your debts - but you can overcome them.

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7. You think about debts and bills constantly

Trouble sleeping at night? No appetite? Deteriorating health? The mental effect of debt stress can be crushing to many of us because we often don’t believe there’s a way out of the situation.

As we mentioned above, while the reality of acknowledging your debts can initially feel harsh, this brief moment of reality is necessary to avoid mentally inflating issues we are yet to fully understand.

Don’t lose sleep over your debts when you don’t have to.

Do you worry about debt constantly?

6. You pay bills at the very last minute

You know the payment dates of your bills off by heart - not because you like to meet them, but because you’re either pushing your payments to the very last second, or your email inbox and phone messages are filled with overdue reminders.

However, paying your bills at the last minute isn’t as serious as our next warning sign…

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5. You pay charges you don’t have to

If you’re finding that most of your regular, outgoing payments are increased due to added fees from overdue payments, this is a clear sign that you need to take a hard look at your finances before this pattern begins to seriously affect your credit score.

However, there are worse signs to come…

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4. Your credit card is maxed - with cash advances

Credit card debt is, without question, one of the most easily avoidable and destructive forms of debt anyone can take on. Sure, if you use your credit card responsibly and meet all your repayments, it can offer some benefits, but here we’re talking about cash advances.

Cash advances on a credit card incur massive interest charges which are very clearly listed by your card issuer. If you’re willingly accruing this type of interest, or making justifications for unreasonable withdrawals at the pub or the casino, it’s vital that you immediately review your spending habits

Loan overdrafts

3. You have had credit denied

Applying for credit should be a liberating and empowering experience. Your credit card should allow you to improve your life and your enjoyment of it. A car loan should allow you the freedom you crave, not spring a trap of ongoing debts.

Worryingly, many Australians may turn to a personal loan when their debts are still in a manageable state, but without the mindset toward paying them off. They’re approved, and then feel a personal loan is a ‘lifeline’ they can depend on if things get too bad.

But consistently poor behaviour with credit results in a lower and lower credit score, which eventually means that credit will be declined - it’s like being stranded on a sinking ship without a life jacket because you’ve already used them in the pool drinking cocktails.

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2. Your favourite colour is red (not really!)

We had to lighten up this list somehow, but living ‘in the red’ is a way of describing someone who spends more than they earn - often knowingly.

It’s about looking at an overdraft or a credit card as ‘free’ money that you’ll just deal with later, not looking at it as a debt that will need to be paid off (and will cost you more from interest charges in the long run!)

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1. ​​You lie about your debt

Lying to yourself about your debts can be one thing, but many who find themselves under the pressure of debt admit to lying to their partner, parents, or friends about the level of debt they are under.

If you have to lie about your debts to your loved ones, you’re choosing to dissolve the trust of a person who loves you and could be at your side when you’re on the road to becoming debt-free, which - as we reach the end of this sobering list - we’ll cover below.

Short-Term Solution: Debt Consolidation

The primary benefit of consolidating your debt is to ensure you can manage your debt to become debt-free, and this is where streamlining your payments can result in better budgeting and overall financial health.

By consolidating your debts, you take all the various fees, interest rates and charges of your existing credit cards, store cards, loans and other debts into a single loan product. This streamlines your debt to have:

  • One total principal amount
  • One interest rate
  • One regular repayment amount and date
  • One set of fees (or better, none!)
  • One loan term to manage repayments or reduce debt faster.

While you’re consolidating your debts, it’s also time to consider a change in mindset around how you approach both taking on, and repaying, your existing and future debts.

Long-Term Solution: Being proactive about debt

Examining your existing debt and learning to be proactive about managing and reducing it can go a long way toward becoming debt-free.

Being proactive about debt means:

  • Creating a budget
  • Living within your means
  • Clearing debt faster with extra repayments
  • Finding ways to improve your income
  • Finding and comparing your options all the time

Personalised loan shopping with Australia’s Money Matchmaker® aims to clear up the confusion around rates, fees, repayments and approval, so we can provide the best consumer experience possible.

We only show you real, personalised rates from Australian lenders that can give you approval on the loan.

Australians could save thousands of dollars by consolidating their existing debts and streamlining their repayments.

Compare debt consolidation loans from our list of lenders today to see how much you could save.

No hidden fees, no inflated rates, no stress, and no impact on your credit score.

About the Author

Shaun McGowan from



Shaun McGowan

Shaun is the founder of and is determined to help people pay as little as possible for financial products. Through education and building world class technology. Previously Shaun co-founded and Lend.


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