7 Common Reasons Why People Are Struggling With Debt

Searching for debt counselling services is one of the most important things people who are struggling with debt can do to help themselves. But how are people getting into debt in the first place? Here are 7 reasons why many people struggle with debt.

1. A reduction in income

When someone has to deal with a reduced income, but their expenses are staying the same, they are at risk of getting into debt. They will have to write down a budget and to either reduce their expenses, or find a new source of income.

2. A divorce

Unfortunately, many marriages end up in divorce, and divorces are generally expensive. They are even more expensive if divorce lawyers have to get involved, as one of the two parties might even have to get into debt just to hire one.

3. Poor money management skills

Many people simply have no idea of where their money is going each month, and they can end up spending too much and getting into debt without even realizing it. Making a budget, or seeking debt counselling, are good ways to learn how to manage money.

4. Medical expenses

Even when you have health insurance, medical expenses can quickly add up and put you into debt. Many people have to use their credit card when they visit their doctor, or when they go purchase the medication they need to stay healthy.

5. Poor communication between spouses

If you are married, or living with a partner, you should be able to be completely honest about your financial goals. Some people can get into debt because they are sharing their life with a spender, and have no idea of how much money their partner is spending each month.

6. An addiciton to gambling

Gambling is addictive to many people. Some people are so obsessed with the idea that they will eventually get rich while gambling, that they might end up loosing nearly everything they own. Getting rid of a gambling addiction is difficult, but it’s necessary to avoid a financial disaster.

7. Not enough savings to face unexpected situations

Saving money can help you avoid debt. People who have no savings, or not enough savings to face unexpected situations, can end up struggling with debt after loosing their job, or contracting a serious illness. You should try to save at least 3 months of your living expenses.

Leave a Reply