The Six Most Common Reasons For Going Into Debt
Debt can be one of the biggest contributors to our unhappiness. It is a nagging presence in our lives that always brings us down, no matter how well we may be doing in other areas. There are common reasons why people go into debt. However, all of these factors can be avoided or dealt with. Here are the six most common reasons why people go into debt.
Education Expenses
Student loans are a major reason why people go into debt. It’s ideal that you avoid taking out student loans that you cannot pay off, but oftentimes this is not possible. If you are suffocating under student loan debt, it’s best to speak to a financial specialist who can help you to consolidate. If you are still in school, consider working part-time to help with the expenses, or work extra hours in the summer.
Poor Financial Decisions Early On
Many otherwise responsible people find themselves sinking under credit card debt that they accumulated when they were younger, less responsible and not thinking about the future. We all make bad decisions, but avoiding these debtors will just hurt us in the long run. It’s best to confront your credit card companies to talk about payment plans. Or, if the debt has become too severe, speak to a bankruptcy attorney.
Divorce
Divorce can put us under mounting piles of debt. Between attorney fees and the sudden loss of a two-income household, post-divorce finances can be a nightmare. Speaking to a financial planner can be a wise choice and help you to get used to existing in a single-income household. It may also be wise to speak with a lawyer to speed up the process and avoid financial trouble in the future.
Children
Children are wonderful, but they certainly are expensive. Many couples and individuals who were previously debt-free find themselves suddenly relying on lines of credit now that they have a child in their lives. Creating a monthly budget and cutting unnecessary expenses can often be the answer to dealing with these new expenses. If you find yourself starting to become overwhelmed, seek a financial planner. You should also decide on what activities your kids can do. Some sports teams or music lessons will cost money, and letting your child choose which activity to focus on that year can ease some of the financial burden. Do not feel like you have to keep your child involved in too many activities that not only can cause stress, but can put a hole in your wallet.
Medical Expenses
Medical bills can push us into debt faster than anything else. If you are in an accident, you can go from debt-free to utterly sinking in it in a matter of seconds. Be sure that you get a good health insurance plans that fits your needs to avoid major debt in the future. If you are facing mounting medical expenses due to the neglect of someone else, it’s crucial that you speak to an attorney as soon as possible, say the experts at Denali Law Group. It you are not at fault, you can be compensated for all those costly medical bills.
Job Loss
While unemployment benefits are designed to keep people afloat during times of joblessness, they don’t always do the trick. Sometimes our benefits aren’t enough to sustain us and we turn to credit cards. When you are without reliable employment, using credit cards is hugely discouraged. Even if you are confident that you will gain employment again in the future, this is the utmost worst time to take on new debts.
Going into debt can be crushing, but there is always a way out. If you find yourself overwhelmed, it is best to confront the problem head-on and seek the help of a financial planner or, in some cases, a lawyer.
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Category: Debt
