Today, many Americans are drowning in debt thanks in part to a bad economy. People are finding it difficult to find a job after graduation or a new job after being laid off from their previous job. It is also tough for Americans to escape debt due to the fact they have families to care for in which being in debt makes it hard to provide for them necessities such as food, clothing, shelter, and education. Although there are many reasons why people fall into debt, below are four major reasons why people fall into debt.
Education
In today’s unstable economy, many people are determining whether or not to attend college. With tuition costs rising, many people are entering the “real world” already in debt thanks to student loans. Many students would like to pay for college themselves; however, with exuberant costs, they can’t afford it, so they turn to student loans. Students take out loans to pay for their education in hopes of finding a job right out of college and paying the loan off. Even so, upon graduation, they are having trouble finding employment. Since they are having trouble finding a job, they often find themselves in debt right after graduation. Students may then decide to pursue a graduate degree, which would allow them to defer payments until they are finished.
Money Management
Many people do not know how to budget their money or spend what they have wisely. This can cause trouble. If you find it hard managing money, create a budget or keep a money journal. Write down every purchase you make and this way you can see where the unnecessary spending is. Without this, you could be spending thousands of dollars on items you do not need. Chances are you will put this on your credit card and when the bill comes, you will only be able to pay the minimum balance, which results in a rising interest rate and late fees.
Gambling
Many people fall into debt because of gambling problems. People play the lottery and go to the casino and take the chance of winning big. While most of the time they don’t hit the jackpot, they keep going back in hopes they will. They drop more and more money they don’t have in hopes of winning big to pay off what they have already lost. As a result of this, not only do they wind up in debt; they also have an addiction.
Medical costs
Another common reason people fall into debt is due to unexpected medical costs. Gaps in coverage, increasing costs, and lapsed policies are also factors. It is becoming common for doctors to accept credit cards because they want to be paid at the time of service. They don’t want to wait around for your insurance company to pay. By charging your visit, you risk not being able to pay it off fully when your credit card bill finally arrives.
Get Help!
There are ways for you to receive debt help. First, take matters into your own hands. Keep track of your spending and eliminate any unnecessary purchases (do you really need those black peep toes when you already have five pairs at home?) When your credit card bill arrives, pay off the entire amount right away and by the due date. If you are not able to pay it, try to pay as much as you can. This will reduce the number of payments you have to make. No matter what, you can always ask for help. Many credit-card companies will work with you to set up payment plans. You could also try debt counseling. In the end, there is help available to you - you just have to find the right solution for you.
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About the Post
If you would like more information on ways people get into debt, contact Jeana Olchowy. Follow her @jolchowy25.
