What are the Top 5 Causes of Debt?
Did you know that more than 50% of the American population are in debt? That is about 1 in every 3 Americans that holds 10 or more credit cards or have requested for bad credit installment loans.
Where does this debt come from?
Without further ado, here are the top five causes of debt in America:
1. Reduced income/same expenses
When we experience job demotion, our salary drops for some reason our expenses do not fluctuate. This is why the most common cause of debt is when income is reduced and expenses either stay the same or increase. In order to avoid this, just make a conscious effort to be aware of any changes to your income or expenses so that the balance is not thrown off.
We may have all heard the statistic that 1 in 2 marriages end in divorce, but we sometimes do not think about the financial impact that divorce can have. For marriages that involve joint accounts, mortgages, vehicles, and children divorce can truly be a complicated web of financial chaos. Some individuals find that signing prenuptial agreements can provide the safety net they need in case of divorce.
3. Poor money management
This may seem simple, but mismanagement of money is a leading cause of why the majority of Americans live paycheck to paycheck.
An easy money management mantra to live by does not spend more than you have.
4. Unemployment and Earning a Minimum Wage
At the present time, the job market in America is slowly getting better, but it isn’t happening overnight. Because of the financial struggles that the economy currently faces, employers are not able to pay what they should be able to pay their workers.
With that being said, most Americans earn less than they need to pay their monthly bills such as utility bills, internet bill, and the like. As a result, this leads to little amounts of debt every month that eventually add up.
5. Medical expenses
With or without insurance, medical and/or hospital bills can be extremely expensive, but we need to take care of our health. No one wants to deny themselves of their family medical care, but it does come at a cost. Having said that, emergency medical expenses are one of the top causes of bankruptcy in the United States today.
No matter where debt comes from, it can quickly take over your life and cause you stress and depression. There are options to get rid of your debt whether it be through bankruptcy, debt settlement, loan consolidation and/or credit counseling.
Given the following pointers above, if you feel that your debt is becoming too overwhelming for you to handle on your own then do not hesitate: call a financial advisor immediately before your financial situation gets worse.
With that being said, we at Citrus North are more than willing to help, educate, and give you the financial aid that you need the most today. Everything is done online so you do not have to worry about going outside to run errands.