Personal Debt: The Top 5 Causes and How to Avoid Them
Most people's biggest worry is excessive debt. Financial issues are one of the leading contributors to divorce and suicide. We are bombarded with opportunities to increase our debt every day, through credit card offers and financing opportunities.
While there are many things that can create excessive debt, the following 5 are among the primary culprits.
Unemployment can force you to rely on credit to make ends meet. Most families lack an emergency fund, and the credit cards are put into action rapidly.
Overspending is easy when you use credit, and this can lead to financial problems down the road.
No budget accountability often leads to uncomfortable situations. It's important to have a budget and financial goals in order to achieve the good things you want in life. Having a spending plan and setting aside money for yourself will help you reach your goals and improve your overall financial situation.
Unwise use of credit is a way of self-soothing. Some people overeat or drink. Others find healthier ways to cope, like exercising. One of the most damaging ways to make yourself feel better is by shopping. It becomes very easy to use a credit card to temporarily improve your mood by buying something that has caught your eye. If you have credit card debt with high interest rates, it can be difficult to manage your debt.
Divorce can be a costly and time-consuming process. Not only can you lose half of your possessions and your net worth, you might be paying your ex-spouse for years to come. You’re also likely to be stuck with a big attorney bill. If you’re considering a divorce, it’s important to consult with an experienced family law attorney to learn more about the process and what to expect.
With determination and effort we can get out of debt; only use credit as a tool, and never as a crutch. Unemployment is a difficult reality for many people. Consumer debt can quickly become a necessity for survival when someone loses their job. Research and act on alternate streams of income. Most families lack an emergency fund, which means they have to rely on credit cards. It's important to try to avoid falling into the habit of just doing enough work to not get fired. Instead, put in the time and effort to become an indispensable member of your company. If you believe your job is in jeopardy, start looking for a new position! Being proactive is key. Lastly, start your emergency fund today. If you already have one, great!