TOP 5 REASONS WHY PEOPLE GET INTO DEBT

Job security, financial pressure and medical emergencies keep our mind occupied most of the time. These things lead to many other tensions that we are at times consciously unconscious about the money that is flowing out. In order to prevent such depressions we either get expensive stuffs for ourselves or dine in some posh restaurants. At the beginning of the month when the credit card bill appears our eyes pop out to see the amount. The outstanding balance generally exceeds your income and then we find it difficult to pay it back.

What are the causes for people falling behind debt?

1. Changes in life.

Drastic negative changes in a person’s life can lead to debt. That includes sudden financial loss, unemployment and prolonged disability. When an individual is unable to pay off the outstanding amount due to financial doldrums they often fall into the trap of debt. If a person finds that there is a steady decline in his income then he needs to work on the spending habit. As it is one of the major causes that leads to debt.

2. Lack of attention to your finance.

Lack of attention on a person’s financial situation can be one of the major causes for debt. Budgeting helps in the process of evaluation as well as figures out where the money is flowing. An individual generally ensnare into debt when he is inattentive towards his expenditure and have a reckless spending habit.

3. Greediness leads to debt.

Greed supposes to be one of the 7 deadly sins in Christianity. People are often puppets of their own unnecessary desires that pave the path for debt in their life. Human tendency is to compare his wealth with the other competitors, this stimulates the desire to get more than he requires or afford. Try to avoid stuffs that you find unnecessary or else give some time before thing of buying expensive as it might help to control careless spending.

4. Communication gap.

Two individual might not share the same opinion on the financial matter. A budget is planned for a family would be different from that of an individual. If there is a communication gap within the family members then financial planning would be difficult and that may lead into the land of debt.

5. No savings.

A person can avoid incurring debts by saving more money. Life is filled with unpleasant surprises and he can need money at any point of time. Therefore he needs to save more so that prevents him to borrow in time of emergencies. College education or purchasing a car is an expected expense so if he save and spend that would prevent him from taking loan. As the loans have high interest fee an individual tends to pay more than the original price. With little discipline and sincerity he can manage a hefty bank balance. He might take time but an earnest practice can help to master this art.