Debt Reduction

6 Reasons People Go Into Debt

In an economy that is chaotic and challenging, it’s no wonder that people find themselves in debt more often than not. However, there are also a few common reasons that you might find yourself underwater and in need of a way out. With that in mind, read on below for a few of the most common reasons people find themselves owing money and having no way to pay it.

Medical Bills

One of the most common reasons for unpaid debt is medical bills. Lapsed policies, expensive medical treatments, medications, and even emergency room trips are enough to land you in a pile of debt that you can swim out from under. Everything that is done in the medical world is expensive and you usually need a lot of treatment to get well. If this is you, know that you are not alone and that there are medical loans out there to help. If you have unpaid medical bills, they are worth checking into.

Student Loans

When you graduate from college, you don’t realize just how much of a toll student loan payments can take on your finances, until you get behind and then default on your loan that is. This is one of the most common reasons that people are behind on their bills and even a reason that many people end up filing bankruptcy as well.

Poor Money Management

Poor money management has to be the most common reason that Americans get behind on their bills. Many people just don’t have the financial knowledge or the experience needed to manage their money the right way. This can quickly lead to financial problems and debt that they don’t even begin to know how to get out from under. If you or someone you know is struggling in this area, look into classes from reputable experts to help you learn better money habits.

Overspending

People today have an “if I want it, I should get it mentality,” which often leads to overspending. This normally occurs when people don’t set up a budget and live above their means, keeping up with the Jones’s, so to speak. The best way to get out of debt in this situation is by creating a strict budget that you stick to and learning that what you want isn’t exactly always what you need.

Job Loss

One of the most common causes of swimming in debt in today’s economy is job loss. The lack of income can force you to live on the savings you have and when that is drained, debt isn’t far behind. It’s even worse if you didn’t have any savings to begin with. Careful planning is key and having an emergency fund with several month’s worth of income saved up is recommended. Start with $1000 and build up from there.

Unexpected Expenses

Whether it’s a death in the family, having to be out of work due to an injury or some other unexpected expense, these can lead to being in debt that’s tough to get out of. Depending on credit cards in these situations just leads to a whole other type of debt as well. An emergency fund is your best defense here as well.

These are just a few of the most common causes of debt that you should know about. There are many more. Learning to budget and manage your money will help.

Working on Your Debt?

Join our FREE newsletter to get even more helpful tips straight to your inbox.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

Leave a Reply

Your email address will not be published. Required fields are marked *