The economy has taken a knock for quite some time leaving people in debt due to job loss or poor investments.
Getting into debt can happen to anyone. According to a 2015 World Bank Report, we’re the most indebted country in the world with 21 million people in debt, of which about 10 million are more than three months in arrears on at least one of their debts. Debt Busters believes this is due to personal loans, car repayments, retail accounts and bonds, but there are other contributing factors:
1. Low income – Whether your salary is just low or you’ve taken a pay cut, low income can clash with your lifestyle if you live beyond your means.
2. Credit cards – Don’t always depend on your credit cards – and never use your credit cards to pay off other debts, as you will just incur more debt. If you have no other choice, make sure you pay it off within a month or two.
3. Poor budgeting – Being unable to manage your money properly can cause you to fall into debt. Always check your spending habits so that you’re able to budget wisely.
4. Divorce – Divorce on its own its already unpleasant, but having to dole out even more cash to lawyers to sort out your settlement can be very expensive.
5. Gambling – Gambling is an unnecessary and expensive luxury, and it can become an addiction. If you don’t have any money lying around, it is better to avoid it. For help with gambling addiction, visit: The National Council on Problem Gambling.
6. Illness – Your health always has to some first. Unfortunately, unavoidable health problems can put a strain on your finances, especially if you don’t have medical insurance.
7. Not saving – If you don’t put a little bit of money aside for those rainy days, you may have to resort to using credit cards or apply for loans when those emergencies happen.