When It Rains, It Pours: How to Tell If Your Debt Is a Problem
There’s an old saying: when it rains, it pours. Anyone who’s lived long enough knows exactly what that means. It’s never just one thing.
This summer, it wasn’t just one thing for me. We had a family trip already on the calendar. Then, in the middle of it all, I lost my father. Two months later, I’m in the thick of getting my oldest ready to leave for college. Travel, loss, and a launch into the next chapter of his life — all stacked on top of each other, all needing attention at the same time. If you’ve noticed Monthly Money went quiet for two Fridays, now you know why. I’m back, and glad to be.
I’m not telling you this looking for sympathy. I’m telling you because I think most people know exactly this feeling, even if the specifics look different. Life doesn’t ask permission before it piles things on. A trip you’d already planned. A death in the family. A kid heading off to school. And it’s not just the big, obvious things — it’s the water heater that picks the worst possible week to go out, the car that needs new brakes the same month the roof starts leaking. None of it waits for a convenient time. It shows up all at once, like it’s coordinating against you.
Here’s what I’ve noticed, both in my own life and in years of sitting across kitchen tables with people going through exactly this kind of stretch: this is often precisely when debt creeps in. Not because anyone was careless. Not because anyone overspent on purpose. Just because when everything is happening at once, the credit card gets the overflow. A flight gets booked without much thought. A repair goes on plastic because there’s no time or bandwidth to think it through. A few extra expenses land on a card “just this once,” and then life moves on to the next urgent thing before you circle back.
That’s not a character flaw. That’s just what happens when the season is heavy. But it’s worth knowing, because if you don’t catch it, that overflow debt can sit there quietly long after the season has passed.
So this month, I want to help you do two things: recognize when you’re in one of those “it’s pouring” seasons, and know what to do about the debt that tends to show up during them.
The 10% Line: Is Your Debt a Tool or a Problem?
Not all debt is the same, and not all debt deserves the same reaction. A mortgage at 4% and a credit card at 24% aren’t cousins. They’re not even in the same family. One is a tool. The other, past a certain point, becomes weight you’re carrying for no good reason.
Here’s the line I use, and it’s simple on purpose: if the interest rate on a debt is above roughly 10%, it’s no longer working for you — it’s working against you.
That’s not an arbitrary number. It’s close to the long-term average return of the stock market. So if you’re paying more than that on a debt, there’s no reasonable investment strategy that out-earns what that debt is costing you. The math just doesn’t work in your favor.
Below that 10% line, debt can genuinely be a tool. A mortgage helps you build equity instead of paying rent forever. A reasonable auto loan gets you to work — though it’s worth watching the payment, not just the rate. A low interest rate on a car you can’t comfortably afford can hurt your cash flow almost as much as a bad rate would, just in a different way. Used carefully, even some low-rate personal loans make sense. These aren’t weights — they’re mostly load-bearing.
Above that line — most credit cards, a lot of personal loans, buy-now-pay-later balances that crept up during a hard season — that’s different. That’s the stuff worth setting down before it sits there quietly for another year.
A quick way to check where you stand:
- Pull up every debt you’re carrying — cards, loans, anything with a balance and an interest rate.
- Write the interest rate next to each one. Not the payment. The rate.
- Draw a literal line under 10%. Anything above it goes on your “deal with this” list. Anything below it can wait.
- That’s it. You now know which debts are tools and which ones are problems.
You don’t have to fix all of it this week. You just have to know which pile is which.
Setting Down What Piled On
If you’ve had a season like mine — or any season where too much landed at once — the goal isn’t to beat yourself up over what accumulated. It’s to notice it, name it, and start setting it back down now that things have settled.
And there’s a longer-term fix here too. The reason a pile-on season turns into credit card debt is usually the same reason every time: there’s no cushion sitting between “life happens” and “the credit card absorbs it.” A solid cash reserve doesn’t stop the storms from coming — nothing does — but it gives you somewhere else to pull from besides a 24% interest rate. If you haven’t built yours yet, that’s worth doing before the next season catches you off guard. For now, just notice if you had one this time, and if you didn’t, file that away.
This week, I’m not asking you to build a whole payoff plan — we’ll get there over the next few weeks, with specific steps for tackling the above-10% debt once you’ve identified it. Right now, I just want you to know what you’re carrying. That’s the whole assignment.
This month’s climb: Sit down for fifteen minutes. List every debt, its balance, and its interest rate. Draw the 10% line. No spreadsheet skills required, no big decisions yet — just clarity.
Life will pile on again at some point. It always does. But you don’t have to keep carrying what piled on last time.
See you at the top.
This article is for educational purposes only and does not constitute personalized financial advice. Please consult a licensed financial professional regarding your specific situation.
