Eighty percent of people in America are in debt. There are many reasons that people are in debt.
Here are some of the common reasons people struggle financially and what to do if you find yourself in debt.
More people are choosing to further their education. While furthering your education can increase your chances of living a successful life, it comes with a price. Most people will need to take out a loan to advance their education. Student loan debt is growing. In fact, the 2016 college graduate had an average debt of $37,712. You can’t use bankruptcy as a tool to get out of your student loan debt, but it can help alleviate your other financial burdens.
The problem with student loan debt is that the payments may cause you to miss other important payments.
Credit card companies offer great rates and interest-free periods. They also offer rewards for making a certain amount of purchases. That is why they can be alluring to many people. However, problems arise when you charge more on your card than you can afford. You can also get into credit card debt if you get multiple credit cards.
You can avoid this by paying the balances in full each month. You should also avoid applying for a new credit card unless you really need one. However, if you find yourself in credit card debt, then you will need to talk to a debt relief specialist to discuss your options.
Many people today dream of being entrepreneurs. Unfortunately, that dream does not come true for some people. It takes money to start and maintain a business. Many people get into debt because their cost exceeds their revenue.
Divorce is something that half of married people will go through at some point in their life. A divorce can easily put someone in debt. Court costs, moving costs, child support and alimony are just a few of the many expenses that are associated with getting a divorce.
Underemployed or Unemployed
Unemployed is when someone does not have a paid job, but they are available to work. Underemployed is when a person is working, but the income is not enough to pay for expenses. Being underemployed or unemployed can cause you to fall into debt because you may be forced to use loans or credit cards in order to make ends meet.
Poor Money Management
In many cases, people fall into debt because of poor money management. You should set a budget every month so that you can keep track of where your money is going. It is also a good idea to save at least 10 percent of your income.