Which of the following is NOT a sign that you have too much debt?

• A. You cannot make your minimum credit card payments
• B. Your paycheck is being garnished by a creditor
• C. You are considering a debt consolidation loan with extra fees added
• D. You are budgeting and paying down debts on time

Answer: (D)

Managing debt responsibly means your income covers both living expenses and debt obligations, and you’re actively reducing what you owe. Budgeting and paying down debts on time is not a sign of being overwhelmed by debt; it shows you have a plan, you’re staying within your means, and you’re improving your financial position over time.

Red flags that indicate you may have too much debt include not being able to make minimum payments, which means your obligations exceed your available income; wage garnishment, which shows a creditor has taken legal action to collect debt; and considering a debt consolidation loan with extra fees, which can signal that the debt load is heavy and the terms may add more cost rather than reduce it.

So, budgeting and paying down debts on time stands out as the healthy practice that indicates you’re managing debt well, not overextended.