What’s Keeping You From Getting Ahead?
A good deal of managing your debt is to recognize and understand the causes. The number one cause of overwhelming debt in the United States is poor money management. Fortunately it is also the most easily remedied. By creating a spending plan or a budget, it becomes much easier to track spending and take control of money management. But what about the other leading causes of out-of-control debt?
Reduced Income or underemployment can also be a leading cause. This is a situation where you are forced to take a cut in pay or to work fewer hours while outgoing bills remain the same. These are situations where taking extra precautions are critical.
Divorce and gambling addiction are also leading causes of debt. As are medical expenses, unexpected injuries or illness. The solution is to save as much as possible. Set aside enough to pay all of your expenses for three to six months should something unexpectedly keep you from being able to work.
In my job, I witness individuals on a nearly daily basis who simply do not understand how the flow of money works. It is important to get a firm grasp on concepts such as interest rates and return on investments. The economy is constantly fluctuating and can impact each of us individually. While everyone isn’t expected to read the Wall Street Journal for fun, it isn’t a bad idea to get into the habit of understanding how oil prices, the stock market, and foreign policy can impact interest rates on the money we borrow and the interest our money earns.
