The Real Reasons People Get into Debt

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There are an endless number of circumstances that cause people to accumulate debt. It can be difficult to achieve financial stability once burdened by a significant level of unsecured debt, but there are ways to avoid it and stay on track with your finances. Here are the real reasons people get into debt:

  1. Personal issues

The American Psychological Association states, “About 40 to 50 percent of married couples in the United States divorce. The divorce rate for subsequent marriages is even higher.” Divorce can be a financial burden and an added stressor when you are already worried about your finances. Life can get hectic sometimes and it’s easy to encounter the unexpected. Divorce, death, and a multitude of issues can affect your financial stability. It’s important to take the time to deal with the unexpected, but to also take the necessary steps in maintaining your finances. Money cannot be ignored in difficult situations and it is essential to spend carefully during these times.

  1. Gambling

If your personal finances are worth anything to you, then they should be kept in your bank account and not thrown on the card table in the hopes of getting richer. Rehab International reveals that a recent study found “approximately 2.5 million adults suffer from compulsive gambling.” You could be affected by gambling and not think of it is an issue, but it is crucial to get help if you’ve noticed a pattern in your gambling habits. This is a common reason Americans get into debt – a trip to Vegas is not the solution to financial problems. Would you bank your future on the same chances of winning the lottery?

If you’re looking for ways to unwind, there are plenty of options that won’t put your finances at risk.

  1. Medical expenses

Emergencies arise and medical bills can quickly become insurmountably expensive. You need to be prepared for these types of situations and have a backup plan. There are ways to ease the burden of medical debt, but it is key to have a health insurance plan that you know will cover you in any circumstances – emergency or not.

  1. Credit cards

It should come as no surprise that credit cards have once again made it on the debt list. Credit card debt can pose a danger to your finances with consistent swiping and increases in prices, such as with gas or food. It can be easier to use your credit card to grab food on the way home, but those purchases add up over time. If you’re busy and things are falling by the wayside, it’s easy to swipe your card and tell yourself you’ll deal with the bill later. Don’t fall into this trap. Make a plan that will help you get organized to avoid using the cards as much on purchases that can be avoided.

  1. Student loans

Student loans can be a huge weight on your shoulders, regardless of how expensive your schooling was or how well your job pays. Any type of loan can become a burden – especially since almost every loan accrues interest – but student loans can be an additional expense that adds to your financial stress. Student loans are beneficial when you are trying to get your degree, but once you obtain your credentials, it can be tough to find a job that will cover your bills, pay off your loans, and leave you enough money to live on. This can become a financial burden and make your finances unsteady until you learn the best way to manage your money.

For some, debt can seem inevitable, but there are ways to become financially stable. Avoiding the reasons listed above will require some planning and budgeting. If you’ve found yourself burdened by debt, we’re here to help you. Contact us to arrange a free consultation so we can help you get back on the road to financial freedom.