No one ever decides that they want to be in debt when they get older. None of the nearly 87% of families currently in debt planned on being in debt. Debt is not something that someone necessarily plans, however it is something that happens, and it can be incredibly hard to remedy. Getting into debt is much easier than getting out of debt. Depending on the amount of debt that you find yourself in, the effects of debt can start taking a toll on you and your health. Debt can actually affect how parts of your brain function. This means that you may find yourself having a hard time trying to learn things and remember things that you have already learned. This can be very trying especially at your job because let’s face it, the last thing that you need to do right now is to lose your job. Being in debt can also cause significant amounts of stress which can make it hard to sleep at night. It can cause you to lose your appetite which in turn means that your body is not getting enough nutrients to function properly. Lack of nutrients and lack of sleep can be a toxic potion for your body. It is the perfect breeding ground for sickness to set in. If you get sick, that means that you can’t work, which in turn means that you will never be successful at getting out of debt. It can be a vicious cycle.
There are a number of reasons that people could find themselves in debt. Again, this is not always because of careless mistakes. Not everyone who finds themselves in debt went out and blew money that they didn’t have. Not everyone who is in debt ran out and opened tons of credit cards and maxed them out. Not everyone who is in debt got there because of their own mishandling of money, most people shop for a used car instead of new and don’t go out to eat every night. Sometimes there is a series of events or even just one event that can cause families or even individuals to get into debt.
Student loans can easily cause someone to go into debt even when they are diligent not to. The majority of times students attend college with the hopes that they will get the degree or certification to work in the field that they want to work in, the dream job that they have had for as long as they can remember. Unfortunately, that is not always the case. Sometimes after they successfully complete college and earn that degree or certification, there are no jobs in the field that they wanted in. This means that they must sometimes take another job that doesn’t pay as much until another job in the field of their degree comes along. Majority of the time those jobs that don’t pay as well don’t pay off the student loans quickly enough for them to disappear. When you’re working hard at getting out of debt caused by student loans, a lower-paying job can make it seem almost impossible. College students figure that they will attend college, get their degree, then come out and get a job making enough money to pack back the amount they used to go to college, but when that doesn’t happen they find themselves drowning a pool of debt before many of them even start a family.
This subject is a touchy subject, however, not everyone who has debt due to credit cards has it because they misused or abused the credit cards. Sometimes we are drawn into a specific credit card offer and they offer an introductory rate that is hard to pass up. This introductory offer just so happens to last about a year. Long enough for you to use the credit card, rake in some nice charges, then they change things on you. They change the introductory offer and sometimes even the interest rate. This means one day you could think that everything with your credit card is fine, then the next day you see that not only do you owe money for the charges, but you also owe money for finance charges that are completely new to you. This action not only makes credit card users feel blindsided, but it can also quickly throw them into a world of debt that they haven’t budgeted for.
No one ever sees a divorce in their future, therefore not many people plan for a divorce. When the inevitable happens not everyone is prepared for what may happen next. The majority of the time when children are involved there is an order placed for the parent who does not have custody of the children to pay child support to the parent that does have the children. Another thing that is usually never thought of is alimony. If your state is a state that recognizes alimony then you may be forced to pay alimony on top of the child support amount. Both of these amounts are based on your income, therefore the more you make, the more you pay. This takes a large chunk out of your income meaning that if you don’t have much wiggle room with what you already have coming in, you can find yourself ever more strapped after these orders are in place. If you’re not in debt these can quickly put you there, and if you are already actively attempting different getting out of debt strategies these two things could make it more difficult if not impossible.
Nobody ever plans on getting sick or hurt, and the majority of the time people believe that if they have health insurance that they are fine. What they don’t realize is that health insurance doesn’t cover everything, and sometimes there are certain deductibles and co-pays that need to be met and paid. If you are looking at an extended stay in the hospital, insurance only covers a portion of the bill, meaning if you are severely injured or hurt then you will still be stuck paying some of the bills. Depending on the condition these bills could quickly become astronomical, leaving some families wondering how they are going to do it. If one spouse or another is the one that is injured or sick then they could find themselves out of work for a significant amount of time. This means that what was once a two income family is now a one income family. The stress of losing an income coupled with the stress of a sick or hurt loved one is enough to cripple anyone, but add debt onto that and you can begin to see depression. Even if the injured or sick patient isn’t a spouse, but maybe a child. When children are sick or hurt and have to have an extended stay in the hospital one parent typically wants to be with them, and this too can lead to missed work which means lower paychecks and sometimes financial struggles. No matter who it is, when dealing with medical issues, many families are already stressed, but couple that with missed work and medical bills and you could quickly see one financially healthy family now all of a sudden drowning in debt.
Sometimes it’s not an emergency with a loved one that comes up and tends to cost thousands of dollars, but it’s an emergency with your house. A house is a necessity and keeping a home up can be quite expensive, but when things go wrong you could find yourself struggling to find the money to fix expensive things that break down or go wrong. Sometimes a broken furnace can lead to a costly replacement. The expense of replacing necessary parts along with the expense of hiring professionals to perform the work could end up being more than you had budgeted or saved. There is no other option but to borrow the money needed to repair it. The outside of your home must be kept in proper working order in order to protect the things inside the house including your family. If problems arise with the roof of your house then you could find you and your family in need of a new roof for your home. This is not cheap, and not everyone has the money laying around the replace a rood. Sometimes some of the work could be covered by insurance, but not all of it. This is another instance that could lead to debt. Trying to find the money to fix an issue within your home could leave you trying to figure out money saving options and getting out of debt options.
Along with the health consequences of debt, there are other issues that could arise for those that are in over their heads when it comes to debt and they can’t see their way out. Some may face eviction and have to move if they aren’t able to pay their mortgage. When people face debt they end up having to make decisions about their money that they sometimes don’t want to make. Sometimes that includes deciding which bills get paid and which ones don’t. While it may seem like a good idea to forgo one bill until the next month, this could cause a problem when extra money is needed after the new month rolls around. This is a never ending cycle that can cause payments to get so far behind that it’s impossible to catch up. Aside from eviction cars can become repossessed if debt becomes too troublesome. Another possible side effect of debt is a bank levy. None of these outcomes are positive just as debt isn’t positive, which is why getting out of debt should be a positive process that is aimed for.
Changes
Getting out of debt is not a quick process, especially depending on the amount of debt that you are facing or dealing with. Although it could be a long road towards getting out of debt keeping your eye on the prize will make it worth the struggle no matter how long it takes. Small baby steps can help you succeed with your goal. Consider skipping weekly or daily trips to your favorite coffee shop. You can brew coffee at home and get some of the same flavors that you can get there for a fraction of the cost you spend at these fancy shops. Some loans that have incredibly high interest rates can be refinanced to lower the interest rate. When you refinance loans you save money. Loan consolidation can combine multiple loans into one with a low interest rate as well. A financial planning adviser can help tremendously with some of these tasks and offer getting out of debt suggestions you may not have thought of. Sometimes downsizing and moving into a smaller home can reduce the burden of a huge mortgage payment that is difficult to pay. Instead of shopping for the newest car with all the newest features you can shop for a used car. Buying low cost cars will save you money on your payment, save money on finance charges and even save you money on your auto insurance.
As mentioned above, no one intends to go into debt on purpose, but as we can see it can definitely happen in the blink of an eye causing you to worry about getting out of debt. Keeping a close eye on your finances can help avoid a huge problem with debt, because you can begin to track problem areas and remedy them before they turn into bigger problems. If you begin to see that you are not able to make it an entire month without running out of money or having to use credit cards, then it may be a good time to sit down and track your spending to figure out where you can cut some expenses. Brewing coffee at home seems like a simplistic answer, but removing those minor expenses can start to add up. Try to have a savings account for unexpected expenses that arise. This can be extremely helpful for household repairs that are expensive as well as hospital or medical bills that may arise. With a little planning now you can rest easier later down the road should something unexpected come up. These tips can help eliminate the worry of getting out of debt that you never expected to have.
