Feeling the Weight of Your Debt

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Too much debt can be serious business. Don't take my word for it. Ask one of the thousands of U.S. troops who have been barred from overseas duty because they have so much debt, they're considered a security risk.

The Pentagon worries that troops with financial problems can become distracted or, even worse, vulnerable to bribery and treason. The military can strip the security clearances that some troops need to go overseas if their debt payments amount to between 30% and 40% of their salary.

An Associated Press review of military records (free subscription required to view) found that the problem affects only a few soldiers, but the number is climbing.

What makes military personnel vulnerable to debt? Some soldiers who survive combat, thrilled to be alive and able to live for the day, spend recklessly when they get home.

Some have problems similar to those that can plague everyone else -- lack of financial knowledge and the temptation of payday loans, which let people borrow against their next paycheck at extremely high interest rates.

Even if your job doesn't require you to wear body armor and dodge bullets, the problems soldiers face contain some important lessons for everyone. Ask yourself:

• Is the size of your debt bothering you? If you're spending a lot of time worrying about car payments and credit cards, or if fretting about debt distracts you from work, home, or hobbies, your debt load might be too high for your comfort.

• Do you live for today? Enjoying the moment is important, but not if you have to sacrifice your future. It may be time to take a second look at those debts if they prevent you from saving for retirement or meeting some other long-term financial goal.

• Do you have financial smarts? Before you take on debt, understand the terms and conditions, along with the repayment requirements. Make sure the size of the debt is comfortable for you, not just for the lender.

• Do you visit the payday lender? Even if you don't literally take out payday loans, you're doing something similar if you borrow with credit cards. That high-interest loan against your next paycheck is just sitting in your wallet waiting to see some sunshine. Credit cards, used wisely, can be useful tools, but they can also run a person into deep debt quickly.

Check out the Fool's Credit Center to learn the secrets of the credit industry and figure out how to pay down your debt and improve your creditworthiness. The Fools on the Credit Cards and Consumer Debt discussion board can also lend great advice -- as well as some tough love.

Related articles:

• What's So Bad About Credit Card Debt?
• Managing Credit Cards Intelligently
• You, Too, Can Owe $100,000 on Credit Cards

Fool contributor Mary Dalrymple welcomes your feedback. The Fool has a disclosure policy.