Debt has become a common fixture for so many people today. Sometimes it climbs and it seens to have a life of its own but the reality is all the debt we own today comes from a source, a reason. If you know what is the reason for the debt it makes it easier to fix or prevent the problem. There are 5 common reasons for debt:
1. EMERGENCIES: Sometimes debt is a nessecity. Sometimes there are real reasons why one might borrow money. There are many reasons for this kind of debt: storm damage not covered by insurance, an illness, a much needed home repair, etc. These debts come out of the blue. They were not planned for. Do you plan for your emergencies? Do you have a savings account that can help offset some of these costs? The best way to avoid this kind of debt is to have a plan.
2. THE I WANTS Weare living in a world that is fast, digital and instant. If you want something you literally can have it in an instant. Credit has played a huge role in this. A quick swipe of a credit card and you get to go home with that impulse buy. The I want attitude is giving birth to a burden that people are not even thinking about. If you dont have the cash for it, are you really going to appreciate it in the same way.
3.KEEPING UP WITH THE JONESES: Do you get the green eye monster creeping in when you see your neighbour, friend, family member get the newest and latest item? Jealousy, greed, showing off, pride… there are a lot of diseases at work for this one. The need to show others up, or have the better, latest, greatest and more expensive is unnecessary and damaging.
4.NEEDING THE LATEST AND GREATEST: It’s good to have interests, but if they require a person to always upgrade to the next, best, latest and greatest version, then its an expense that is neither necessary nor important. Too much indulgence in any hobby can cause a person to spend more money than intended. When I think of technology especially do you really need that new cell phone, tablet, laptop simply because it is the newest?
5. LACK OF KNOWLEDGE AND SUPPORT: People need to learn how to manage money, and the right support system is so important to keep you on track otherwise it is very easy to lose control of one’s spending. This has to do with the ease we can get credit and lack of finicual training. We need to learn how to manage our cash flow.We need tools to manage debt on a daily, monthly and yearly basis.
Do you think about the reasons for your debt? Do you plan your debt load? What tools are you using to manage your finicial life?