Business & Finance

6 Reasons Why You’re in Debt

6 Reasons Why You’re in Debt

Debt is a debilitating, crippling cross to bear. It’s hard to imagine life without it, but the truth is that many people are in deep debt. It is a problem that affects everyone, and it’s not going away anytime soon. With this in mind, expert Jordan Sudberg gave out the main reasons people are in debt.

6 Reasons Why People Are In Debt

1. Bad Money Management

Bad money management is what most people think of when it comes to why people are in debt. It’s widely known that if you’re spending more than you make, you’re going to be in debt. However, it’s not as simple as just cutting your expenses down. There are other ways to get out of hand, even if you only spend what you have.

2. Bad Credit

When you have bad credit, you will find it harder to get what you want. Lenders will charge higher interest rates and may refuse your application altogether. It’s said that more than 14 million people in the U.S. have bad credit, and this number is expected to rise as the economy worsens. Not having a good credit score can lead to even more debt than usual, with high-interest charges on loans and other expenses.

3. Unforeseen Expenses

Life is full of surprises, which can add up, causing you to go into debt. For example, emergency room bills are costly, and there’s no way to know when you might need them. It can leave the unprepared with a lot of debt that they never wanted.

4. Medical Issues

Life is full of medical issues, and many of these are caused by an accident or disease. As long as you can stay on top of your medications, this shouldn’t be a problem. However, if you aren’t as prepared, you could go into debt and find yourself in need of medical attention that you can’t afford.

5. Past Emotional Trauma

Those who have been in a dangerous situation, such as a violent relationship, can struggle to recover. People have to pay for the injuries they’ve sustained. The medical bills of these individuals are usually too much for them to handle on their own, and not only do they go into debt, but their mental health can suffer as well.

6. Drug and Alcohol Addiction

In an unfortunate turn of events, some people can become addicted to either drugs or alcohol. Many people turn to these substances when they aren’t happy or feel sad, causing the person in debt to get deeper and deeper into the hole they’ve dug for themselves. It can lead them further down the road toward addiction.

Now you know the first reason why people are in debt. As you can see, it’s not that easy to stop your debt without taking the proper steps. There are other reasons than bad money management and credit score; bad credit is one of them, but it is still a lot more than just bad credit. These are the six primary reasons people are in debt, as told to us by Jordan Sudberg.