Business & Finance

6 Reasons Why You’re in Debt

6 Reasons Why You’re in Debt

There are many reasons that can cause a person to go into debt. Father George Rutler knows that people may make some mistakes and it can lead to debt. According to Rutler there are some common reasons why people get into debt.

.1 Lack of Planning

If a person does not know how to plan their finances or if they do not plan out, they are going to get into debt. A person needs to look at how much they are spending and where their money is going. People may be paying too much money for entertainment and others non necessary expenses. It is important that a person make a plan to see where their money is going.

.2 Impulse Purchases

It is easy to be in a store and purchase an item on impulse. It may be the new model of a phone or something that was too good of a deal to pass up. This shows that a person has little to no control over their spending. They need to take notice of this habit so changes can be made.

.3 Trying to Keep Up

If a person feels they need to keep up with the latest trends and technology they will often go into debt. People always want to have nice things that are around them. If they spend all of their money trying to outdo their neighbors they will go into debt quickly.

.4 No Emergency Fund

As Father George Rutler wants to remind everyone, emergencies are going to happen. Cars break down and homes need repairs. If a person does not have any money in an emergency account, they can go into debt if something bad happens. It is best to have some money put away. This way during an emergency a person does not have to go into debt with larger credit card bills.

.5 Emotional Spending

If a person is feeling bad or if they are feeling stressed, they may go shopping to make themselves feel better. This may help for a couple of minutes until a person sees the bills. This may lead to more stress and more spending. If a person is feeling down, they should find another activity besides shopping. They can try going for a walk or speak to a mental health professional.

.6 Relationship Issues

If a couple is having trouble with their relationship, they may get into debt quickly. The partners may not feel like they are responsible for the debt. They may feel it is up to the other person to pay down the bills. If a couple is married, they are both responsible for the debt. They need to work something out so that they can come to terms with spending habits and develop a plan to pay things off.

These are some of the most common reasons why people get into debt. Once they get into debt it can be hard to get out of. A person needs to take control of their spending and develop a budget to keep them out of debt.