Top Reasons for Debting

In dealing with those in debt, there are certain recurring themes that are cited most often as reasons for debting.  The rationale for debting is typically universal but can be treated with certain steps to help fix the problems.

Top reasons for debting include:

Drop in income.  This may be due to a job loss.  Some have even been forced by their company to take a pay cut.  Whatever the reason, a decline in income spells disaster.  Reversing this might include getting a second job, or finding a primary job that pays more.  Reduce expenses until they are under the amount of income in the household.

Divorce.  If you thought the wedding was expensive, wait till you hear how much the divorce will cost you.  Many lose everything that they have and otthers struggle under the burden of child support and all the expenses that raising a child brings with it.  How to reverse this:  Divorce is final, but you get out little by little.  Beginning to save money and make small steps is the way to go.

Manage money poorly.  Those who do not understand good, sound money management principles and would not even try them will find themselves overextended and with their backs to the wall financially.  There are many inexpensive and effective programs, books and other resources available both online and off that can help educate people on the fundamentals of money management.

Underemployed.  When the ole paycheck does not come close to meeting monthly expenses then debt comes to call.  How to reverse this:  ask for a raise, take a different job within the company or try going back to school to re-educate yourself which can help to get a higher paying job.

Gambling.  It is so easy to get into, and so easy to get loans on the spot when you go to gamble that it is scary.  How to reverse this:  you must confront gambling as an addiction and get help to stop.

Medical expenses.  Devastating health occurrences incur high amounts of debt in a short time. How to reverse this:  you cannot reverse health care incidents that have already happened, but you can live a healthier lifestyle in order to help avoid medical issues that can cause high debt.

Little or no savings.  Debt caused by a lack of money on hand to handle life’s little unexpected expenses is very real.  How to reverse this:  Start small and begin to save.  Start with a short-term savings account and then move to long term options once you begin to create momentum.

Non-existent money talk.  Those who do not talk about money and the way to handle it are a major cause.  How to reverse this:  learn how to sit down and have a quiet, non-defensive conversation about money.  Try to talk about success and agreements first, then move to more difficult topics and go slowly.

Win the lottery philosophy.  Throwing away money week after week in hopes of winning big time is a big time problem.  How to reverse this:  seek help if you find yourself in need.  This is closely associated with gambling.  It is mandatory that a change in mindset occur in order to stay away from trying to win it all with the lottery.

No financial savvy.  People who do not know about money and finances are in this category.  How to reverse this:  take courses offered in your community about money management.  Get help from a financial advisor.  Look for support from your local church.  Many now teach money management courses for free.

The reasons for debting outlined above might reveal some tendencies in you that you might not want to admit outright.  But you can start today addressing some of these issues and become better at handling money.  Do not wait until it is too late to begin.  The time is to start is now.

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This entry was posted on Friday, April 17th, 2009 at 9:22 am and is filed under Debt & Consolidation, Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.