There are many reasons why people get into debt, some of them we have no control of, and some of them result from our attitudes towards money. Whether it is one person’s fault or not, death can have many detrimental effects not just on the person’s financial life but with the psyche and emotions as well. These are just some of the life changes that may lead a person to acquire debt.
As costly as it is to get married, getting a divorce can be equally expensive. Aside from the emotional strains, divorce can impact your finances and can force you into debt. Most of the time, there will be legal actions to pursue to determine how to divide your assets, in which you have to pay for an attorney and the necessary settlements that your former spouse may demand. Not to mention you have to send continuous financial support for your children, if you have any.
One of the leading causes of debt is underemployment. While its effects are not immediately noticed if you have some savings, you will find eventually that your earnings are not enough to cover for your expenses, not to mention inadequate funds to put into your savings. If this continues, it can lead to debt that is difficult to handle. If you find yourself unemployed or underemployed, you should find a way to control your expenses so that they should not exceed your income, or better yet, start finding a second job.
Gambling itself doesn’t put people into debt, but rather it is the individual’s attitude. Unfortunately, as your chase for your losses becomes never-ending, you will find yourself losing more than winning, to a point that you will risk the money that you cannot afford to lose. Because of gambling behavior, many people find themselves not only short of spare cash, but also with zero savings and lost properties.
Illness or Disability
The good- people are living longer now due to advances in the field of medicine, science, and technology. The bad- there are more years to worry about being sick or disabled. While there are obvious improvements in medical treatments and procedures, the lifestyles of people don’t change, if anything, they become worse. If you get ill, you have to pay for treatments to keep you alive, which are not cheap, and if you’re unfortunate, this goes on for the entire duration of your life.
While student loans can be considered a type of good debt, it can take a while before you can pay it off after graduation. Keep in mind that entry-level jobs do not earn you high wages immediately, and there will be expenses that you didn’t have to worry about when you were a student. To reduce your debt, try getting a job and don’t rely entirely on your student loan.
You should always remember that finding a way out of debt is harder than preventing it. To make sure you don’t encounter debt problems in the future, start making lifestyle tweaks and put more into your savings.