Why Do People Fall Into Debt

Debt can be a burden and an add-on stressor in a person’s life. If not managed properly, debt can accumulate over time and causes financial hardship in the future. Things like credits, student, auto, and home loans are some factors that can lead a person into debt because they are usually the largest financial obstacle to tackle and can take years to pay back. Though these are wonderful ideas to invest in, there are some events that can occur in one’s life that may result in losing control of their finances and could possibly lead into debt. There a are number of ways a people can fall into debt.
One way people fall into debt is poor money management. Every person should beware of how much money is needed to care for their monthly expenses. Shelter, utilities, travel expenses, food, clothes, and shoes are some expenses that should be factored in each month. If the person does not keep track of their finances, they may spend their money on their wants, rather than their needs. It’s better to pay your $100 utility bill on time rather than spend the money on purchasing a watch and end up having to pay late charges plus the bill later. Some companies will penalize you for paying late bills, by charging late fees and/or interest that will add on …show more content…
Losing a job can be stressful time anyone. Today, jobs are very hard to come by and can take several months to find depending on work history and educational background. This can be extremely difficult time for single or family households who only have one income and with minimum to no funds saved in case of emergency. In the process of looking for employment, bills are continuing to come in each month and even with assistance, there still may not be enough funds to cover their monthly expenses. Thus, some people may be at risk of losing their home, possession, damage credit rating, and still held responsible for paying any past bills that accumulated during this