NEW YORK (CNNmoney) - The stresses of life may be without number. But your debt is easily quantified. And with the U.S. economy struggling in the wake of Sept. 11, sizeable debt loads pose an even greater danger than usual: layoffs are mounting and bonuses are shrinking, but creditors will continue to expect their payments.
Ideally, experts say, your total monthly long-term debt payments - including your mortgage and credit card payments - should not exceed 36 percent of your gross monthly income. That's one factor mortgage bankers consider when assessing the creditworthiness of a potential borrower.
But it's not the only way to assess whether your debt load is too heavy. Here are five red flags that you may be in over your head.
Five red flags
You have fewer dollars on tap: Your discretionary income -- what you have left after paying bills -- drops. That's likely to be the case if you occasionally dip into savings to cover shortfalls in your checking account, or must take a loan against your retirement funds. "It comes down to, Are you able to save? Are you saving for that future wedding, your next car, your kids' education? If not, something's not right," said Mike Kidwell, vice president and co-founder of Myvesta.org, a financial treatment and debt counseling service.
You max out: You max out your credit cards soon after paying off longstanding balances. In today's low-interest-rate environment, it's often smart to transfer your balance from a high-interest credit card to one with a lower rate, or to consolidate your debt and pay it off with a low-interest home equity loan. But it's not smart to celebrate being debt-free by charging your way into hock all over again.
You stick to the minimum: You make only minimum payments on your debt. Say you've got a $3,000 balance on your credit card. If you just pay a 2 percent minimum on your remaining balance every month and you're charged 17.99 percent interest, it will take you 37 years to pay off the whole amount, Kidwell said. At the end of those 37 years, you will have paid nearly $11,000. Even at a more reasonable rate -- say 14.98 percent, the national average -- full repayment would take 26 years for a total of $7,440.
You're unprepared for the unexpected: You can't maintain an emergency fund. An emergency fund - three months to six months of expenses (more if you are worried you might be laid off) - is intended to bail you out when your roof falls in, your car breaks down or you face some other unexpected, costly situation. Debt payments should not get in the way of keeping one.
You toss and turn: Your comfort level is a less tangible but no less important sign that you're too deep in debt. Put simply, can you sleep at night or do you stay up worrying about what you owe?
What you can do now
The first step toward taming your debt is recognizing that you have more than you'd like. "People who don't want to quantify where they're at are in the danger zone," said CFP Paul Weiner of Los Angeles.
Note every time you charge up a storm or knowingly forfeit your savings in favor of a more immediate pleasure. Count how many times you make a purchase and just assume you'll find a way to pay for it. And start asking yourself why you're really buying something. "So much spending is done to impress other people," said CFP Andrea Spatz of Los Angeles.
Then record everything you spend for a month. "Clothes and food are the big shockers," Spatz said. If you and your spouse each spend $5 a day on coffee and breakfast, that's $200 a month, not counting weekends. That's money that might be better spent paying off high-interest debt.
Next, convert from credit to cash. You're less likely to hand over $130 in cash than to charge the same amount, Spatz said.
Last, commit to paying off your debt systematically. Allocate a fixed amount each month to the task, and have it withdrawn automatically from your checking account, if possible. Your priority should be to pay off your high-interest rate debt first, while continuing to make at least the minimum payments on your other bills.