25 Feb 2019

Reasons Why People Get Into Debt

Getting into debt is very easy and something that can spiral out of control. There is not just one reason why debt can strike, different people have different reasons why they get into debt and circumstance for everyone can be different. Here are a few reasons below. 

Life Changes: One of the reasons we can find ourself in debt could be due to changes in incomes. This could be caused by redundancy which results in less household income and the build up of continuous monthly household bills. Other reasons could include unexpected health related problems or a death of a loved one.

Lack of an emergency fund: If you have a small savings pot to call upon when you are struggling hopefully this will stop yourself getting into debt. Even if it is only £200 it can be a lifesaver if your boiler breaks down or your fridge freezer needs replacing.

According to Money Advice Service 4 in 10 adults have less than £500 in their savings.

Forgetting you are in debt: Do not ignore the fact you are in debt. not opening mail, avoid phone calls and purposely ignoring financial issues will see you get into debt very quickly. If you can’t pay a bill, ring the supplier, tell them why you can’t pay and then agree a plan on what you can do moving forward with them.

Living beyond your means: Do you know what money is coming into your bank account and what is going out on a monthly basis? It may be that you are not even trying to keep up with the ‘Joneses’ in terms of what you are buying. It could be a case of those few lunches that you go out for in the week or that over priced gym membership that you are paying for. Sit down and work out your monthly budget, by doing this you are unlikely to spend beyond your means which will help to avoid debt.