10 Reasons Why You Are Always In Debt
Whatever type of debt you have, there is probably a reason why you have it. I do believe that learning and understanding why you have debt is the first step to controlling it and, ultimately, eliminating it. If you don’t understand your reasons for having debt, then it would be very hard to stop engaging in these debt-inducing behaviors.
Below are 10 common reasons why you may have debt:
1. You are trying to keep up with the spending of others.
You might be in debt because you want the latest and greatest things, and you want to buy the things that you have seen others have. However, if everyone is spending money and going into debt to keep up with others, then it’s just a never-ending circle. An example would be keeping cable even though you know you can’t afford it.
2. You think, “Oh, I’ll have time to pay for it later.”
You might think that you will have plenty of time to pay off your debt later, but each dollar charged now can really hurt you down the track. You should be able to afford your lifestyle now. Can you really afford that item?
3. You were never taught about credit card debt.
Many people don’t know much about — or even understand — credit card debt. Do you know what minimum payment actually means? Surprisingly, many people don’t know! Interest still accrues when you only make the minimum payment (unless you have a 0% interest rate card).
4. You are overspending.
It can be as simple as that. You are spending more than you make each month, and you are charging the rest. This then leads to an increase in your debt. You need to sit down and come up with a realistic budget.
5. You don’t have savings.
Without savings, life can be very hard and stressful. The smallest surprise expense can lead to debt. This is why an emergency fund is important to have.
6. You have a reduced income.
If your income is suddenly reduced, then this can really hurt your budget. This might then lead to you adding to your debt. Try to think of ways to diversify and increase your income, so that you are not as reliant on one form of income.
7. You take on high-interest loans.
If you take on a loan with a high interest rate, then it will take you longer to pay it off. You might be paying more in interest each month than you are paying on the principal, which makes it very hard to get rid of high-interest debt.
8. You have a life.
Life is expensive. Things come up. Medical issues may arise in your family, maybe something with your dear pets, losing a job, and other things. Surprises like these may lead to debt.
9. They want to keep up appearances.
If you have trouble with constantly falling into the comparison trap, consider some sound advice from best-selling author and Ramsey Personality Rachel Cruze. In her book Love Your Life, Not Theirs, she shows you how to quit playing the comparison game, how to think before you actually spend money, and how to start saving like you truly mean it. Pretty soon you’ll be so caught up in your own life you’ll find yourself saying, “The Joneses who?”
10. They’re addicted to stuff.
In other words, they’ve bought into the myth that you are what you own—and they simply can’t get enough. The more they have, the more powerful and confident they feel. But it’s all fake. They can’t afford that stuff and it’s going to weigh them down. At some point their addiction to debt will cause a financial heart attack.
