When does debt become a problem? If you are overextended with debts you can't pay back within six to 12 months (not including your mortgage or maybe your car payment), or if you spend more than 15 to 20 percent of your after-tax income on short-term credit purchases, you may be in financial trouble.

Do not, however, feel alone. It's not uncommon for even careful spenders to find themselves in debt.

Some signs that you are financially overextended include:

You would have an immediate financial crisis if you lost your job.

You spend more than you earn.

You must borrow to pay current bills.

You pay for everyday expenses, such as groceries, by using savings or credit.

You're paying the minimum amount or less due on your bills each month.

You are being contacted by bill collectors.

You can't avoid using credit during the holidays or for your children's birthdays.

You're having problems in your relationships because of money problems.

These are signs that you need to change your spending habits. You may resist admitting you have a crisis because you think the problem will go away. You can't, however, ignore the problem. It won't go away. It's best to understand how your crisis came to be, so you can take control and make changes.