Stuck in debt? It’s probably down to one of these reasons
Debt is just one of those things, right? It’s easy to get in to and seemingly impossible to get out of. Although the latter part of this statement isn’t strictly correct, the idea that debt is incredibly easy to get in to still rings true.
Debt problems plague almost every adult, with money worries being one of the leading causes of anxiety and mental health issues. Debt can have a profound effect on everything around us, from the stability of our homes to our relationships and our outlook for the future. You can find out more about debt solutions by clicking the link. However, taking some time to understand why you’re in this current financial position will help you to see that there is light at the end of the debt tunnel. Want to know more? Read on to discover the most common reasons people get into debt.
You can’t manage your money properly
Living outside your means and spending more than you can afford is poor money management. This is usually when people turn to credit cards to help pay for things like groceries and other essentials, creating a vicious circle of borrowing and interest. If you fail to create a monthly budget and make yourself aware of what’s coming in and going out of your account, then you’re going to struggle to keep track of your finances. Cutting unnecessary expenses and figuring out where your money is going each month is essential for good money management.
It’s just $10, right? Sadly, $10 here and $40 there quickly adds up, and before you know it, you’re gambling is out of control. Gambling doesn’t even have to be a problem for you to plunge yourself into debt. A simple risk that didn’t pay off can leave you borrowing money to cover your mistake for years to come.
Outstanding medical bills
Treatment needed not covered by your insurance? Maybe you couldn’t pay for your cover? When you have outstanding medical bills, or you have an accident and you’re not covered, then it’s a frighteningly fast way to plunge yourself into debt. Often, patients turn to credit cards to pay off their medical bills, leaving them with high interest payments they’ll probably never pay back.
Losing your job or being made redundant has a devastating impact on your cash flow. Leaving many unemployed people struggling to pay bills and cover the essentials while they’re looking for work. Credit cards and loans are a way to make ends meet, but if your new job doesn’t pay as well as your old one, you could find yourself stuck between a rock and a financially difficult spot.
And finally, a personal disaster
These events are shocking and unexpected, which is why having a rainy day fund is so important! From an unexpected pregnancy to the death of a loved and funeral expenses, a car accident, sudden legal bills or even fire or flood damage to your home can leave you struggling with debt.