Cause of Debt

Topics: Debt, Money, Payment Pages: 1 (417 words) Published: October 4, 2011
Causes of debt
When someone income is suddenly reduces then it is no surprise that he or she can go into debt. Many situations and actions can cause debt. Unfortunate situations like medical problems, loss of employment and bad habits all contributes to causes of debt. Medical problems can strike anyone at anytime. People with certain Illnesses that require treatment such as cancer quickly realized how these expenses can add up. Unexpected emergencies can also rack up some debt if not financially prepared. A tornado can ruin someone property including home or vehicles. Without insurance or sufficient savings a family can find themselves in deep debt. It’s important for families to have at least six to eight months of saving expenses for emergency situation. Poor money management and bad habits can quickly put a person in debt. Not having a budget to know how much money are coming in or going out can dismantle anyone saving account. Another cause for debt is too much use of a credit card. It is easier to swipe a credit card then to hand out cash. An undisciplined person can get carried away and go on a spending spree. Gambling can also be a serious problem. Gambling with hard earned paychecks and saving accounts will eventually ruing families financial stability. Being disciplined and avoiding bad habits is essential for not falling into debt. A person who loses his or her job, especially if the person is the sole breadwinner will find himself or herself in money trouble. In those situation People tend to get loans to make end meets. Depends the length of unemployment they can accumulate lots of debt. Periodically schedule bills are also a concern... Bills such as car payments and mortgages must be pay. Children must be fed. And lastly students who gets loan for college can get into debt if he or she used to pay for his or her own tuitions. Those unfortunate times can really put a person in financial hardships. Causes of debt can be very stressful. One might...
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