Theoretically, everyone knows what causes debt: spending more money than you earn. But in practical terms, most people find it challenging if not impossible to avoid accruing debt at some point in their lives. While it might seem embarrassing or make you feel like you aren’t good with money, it’s important to remember that debt is a common problem, and there are many factors in play that make it very easy to fall into the debt trap.
We live a society structure such that many purchases would be impossible without taking on a debt. Very few people can purchase a house or a car without some sort of loan or financing, and yet housing and transportation are things everyone needs. Even more modest purchases such as furniture and appliances can be expensive enough that financing is the only option. Of course loans and financing come with interest and payments, and we end up paying more for items in the end.
Credit and charge cards
In modern society, it is also hard to get by without a credit card. Online shopping is increasingly popular and many shops require credit card payment. Banks and credit card companies offer higher and higher credit limits and enticing bonuses for joining. It is easy to spend more than we can pay off every month, and credit cards are designed to allow this. The companies make more money from people who carry balances than from those who never owe a penny, so they encourage this behaviour.
Even if we are careful, sometimes emergencies happen and we end up not being able to pay a bill, or having to charge more than we can afford to a credit card. A family emergency, a car break-down, a sick pet or a broken appliance – all of these things come up when we don’t expect them. In today’s economy many people can’t afford to save for these events, and end up scrambling to pay off the debt afterwards.
Of course sometimes we know we shouldn’t be spending the money we are, but no one is perfect. Maybe we are expecting things to improve and they never do, or maybe we are going through a rough patch and have no choice but to buy things on credit just to get through until the next pay day.
Whether you think you have a problem controlling your spending or sticking to a budget, or you are just a regular person who fell on some bad luck, there is no shame in seeking debt advice and help, and there are many resources to help you do this. Make an appointment with an expert debt advisor and see what they have to say – they have experience and knowledge of all the main debt solutions available to resolve the majority of problems. Depending on the type and extent of your problem they will also take you through income and expenditure planning in conjunction with analysing the amounts you owe. This gives you a clear picture of how bad the problem is and helps to determine the best solution. There are organisations that provide debt help free so make use of their advice you’ll find it practical and helpful.
Debt is a common problem, and seeking help to overcome it is not something to be ashamed of.