‘Buy now, pay later’ is practically the mantra of the modern world, but you can give yourself a hangover that lasts a lifetime if you use debt to indulge.

A little like a dodgy eye-liner effort, you may need to apply more and more to mask your previous mistakes. But a debt mess is far more difficult to erase.

Here are the five questions that tell you if you’re getting in too deep.

1. Do you find it difficult to distinguish between needs and wants?
It’s possible you ‘need’ far fewer things than you think. Indeed caveman convention (well we now follow their diet) says survival requires just food, shelter, clothing and water. But even in those core categories, your expectations may belie your limitations. We’ll happily pay $15 for fancy water for goodness sakes!

2. Do you regularly make unplanned, impulse purchases on credit?
One of the best ways to keep your finances under control is to plan and cost your spend in any given pay period. If something is going to be unaffordable with one pay, you should spread the cost – stashing the cash – across however many it takes. If you don’t trust yourself to wait until you have the money, use lay-by so you have to. Yes, many shops still offer it.

3. Do you spend more than you earn each pay period?
This is a big warning sign as it means you go backwards each and every time… and the only way to do that is to use credit. You need to live within your means. In fact, you need to live well within your means – smart budgeting is about having a surplus of money each period that you can save for the future.

4. Are you struggling with – possibly growing – debt?
The larger your debt the larger your repayments, which means the less money you have left to live. And pretty soon you may be forced to reach for the credit card again to pay even for the essentials. Potentially a HUGE warning sign.

5. Do you owe more money than what your assets are worth?
A bigger picture consideration but also a critical one; this means your net worth is negative, and possibly going backwards each and every day – hardly good money management or prosperity planning.

Perhaps you could get away with answering ‘yes’ to one or two of the questions above, but any more than that and your future financial security – and that of your family – is in jeopardy. If you answered ‘yes’ to all of them, you need to contact your creditors to ask about more lenient repayment terms or easier ways to defeat your debt. This is the surest way to ensure your current predicament doesn’t dog you forever. Even if your answers were all ‘no’, it’s almost certain your money (rather than you) could be working harder.

Nicole is the founder of and developer of the 12-Step Prosperity Plan, an achievable and even enjoyable blueprint to take Aussies from worry to wealthy. Nicole’s writing has earned her top personal finance awards in both the United Kingdom and Australia. Her career credits include founding and editing The Australian Financial Review’s Smart Investor magazine, and reporting and editing for the magazine arm of the UK’s Financial Times. Author, qualified financial adviser and Fairfax’s Money Matters columnist for the last decade, Nicole is a regular on television and radio. She talks money without the mumbo jumbo. Follow her on Twitter at @NicolePedMcK.