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7 Causes People Get Into Debt

7 Causes People Get Into Debt
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    Have you ever thought of why you are in debt? Have you ever scrutinized the reasons behind your debt problems? We know that debt can lead us to disastrous consequences in our lives. It can consume our assets, bring on mental stress and even hurt our relationships. There are multiple factors that compel people into debt, this is because many are not aware of the causes behind it. Although there are effective debt elimination programs like debt consolidation, debt settlement etc, we must be aware of the causes that leads to great financial errors  so we can avoid be consumed by debt.

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    Understand the causes of debt below to make sure that it doesn’t take over your life in the future.

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    1. Reduced Income: Often your expenses exceed your income. If you delay in taking care of handling your life with a lower income then you are sure to start to take on debt. Make sure that you understand your changed income and create a budget and a plan as soon as possible.
    2. Divorce: More than half of American marriages end up in divorce and with it comes strain on personal finances. The laws in America govern what should be done with a couple’s money during a divorce settlement. When one party demands too much, the other will be forced to go into debt to pay for attorneys as well as what their partner deems necessary as part of the settlement.
    3. Poor Money Management: Most of the time, poor budgeting invokes debt. You must have a monthly budget. Without a proper budget, you will not be able to track your expenses. If you write down your spending for an entire month you can see exactly where you money ends up. This is the best way to learn where you can cut some unnecessary expenses and help yourself avoid debt.
    4. Underemployment: People often feel that underemployment is temporary, but it can have a lasting effect on your life, especially if you have to go into debt to make ends meet. If you are underemployed, calculate your expenses and start looking for a second job. This might eliminate your chances of falling in debt.
    5. Gambling: Is one of the most beloved forms of entertainment for Americans. However in reality, it is just a guaranteed exchange of money from you to “the house”. As loans are easily available today, one becomes easily addicted to the idea of “winning big” and striking it rich. In fact, gambling can easily lead to you effortlessly mortgaging your future to “the house” as you try to win back what you have lost.
    6. Medical Expenses: Lapsed policies and expensive medical treatments make this one of the easiest ways to fall into debt. Everything to do in the medical realm costs money and usually a lot of it. On top of that doctors and hospitals are becoming more and more impatient with people that don’t pay their bills on time. Because of this they tend to turn in patients that don’t have the money to collection agencies. When you don’t have the money to pay for your doctor visit it can be easy to put the bill on a credit card or even to take a loan out to avoid collections.
    7. Little Savings: If you want to avoid unwanted debt, try to be prepared for unexpected expenditures by saving some money. If you have decent savings in place you can use it for emergencies like severe illness, a job-loss or divorce without increasing your debt. Believe me, no one ever regrets saving money for emergencies.

    The above mentioned causes of debt are very common for Americans and can be easy to fall into. However, if you develop good money management and budgeting skills, you can avoid them. Another thing to remember is that it is important to spend within your means, which will further prevent the reduction of your wealth. By taking prudent steps toward financial responsibility you will can greatly reduce the probability of sinking into and accruing more and more debt.

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    Published on July 4, 2018

    Top 10 Recommendations on Money Management Apps

    Top 10 Recommendations on Money Management Apps

    Don’t want to overspend your budget, swipe your credit card too many times, and feel like a financial mess? Instead of beating yourself up for the bad financial decisions you’ve ever made, create a new plan!

    The solution is simple, save more and spend less. But, we all know it’s easier said than done.

    One problem is finding quality apps that save you time and money, and aren’t just hype.

    Luckily, there’re many great money management apps available at your fingertips. Here are 10 reliable money management apps that can help you save money, and crush debt.

    1. Personal Capital

      When was the last time you’ve tracked your net worth? Probably months ago or maybe never. Personal Capital allows you to easily track your net worth and plan for retirement.

      Here are some of its main features:

      • Sync many investment accounts, and expenses (mortgage, credit cards, etc.) in one place
      • Discover hidden fees and how much they’re affecting your retirement plan
      • Wealth management for investors requiring a long-term strategy

      With Personal you’re free to track your expenses and net worth.

      Available for: iOS and Android

      2. Mint

        If your smartphone could only install a few apps, Mint would be one of them. Why? Because Mint tracks all your balances and bills in one place.

        Here are some of its main features:

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        • Effortlessly track all your bills and balances in one dashboard
        • Categorized expenses to understand where you spend your money
        • Uncover hidden fees, and determine your investment style with sophisticated retirement tools.

        Feel at ease with managing your money by a reputable company that isn’t going anywhere.

        Available for: iOS and Android

        3. YNAB

          Everyone needs a budget, there’s no way around it. YNAB (You Need A Budget) is an easy to use app that will change the way you think about money. Their motto is to “give every dollar a job”, and you’ll quickly discover why.

          Here are some of its main features:

          • Easily sync all bank accounts in one place
          • Visually see your debt paying progress with eye-catching charts and notifications
          • Customized categories setting saving goals

          The best part about YNAB is the community that comes along with it. You can hop on the YNAB forum to receive support, listen to the YNAB Podcast or stay tuned for their weekly videos.

          Available for: iOS and Android

          4. Wealthfront

            Albert Einstein once said “compound interest is the eight wonder in the world”, and for a very good reason. The problem is, most people are scared or unwilling to learn the basics of investing. This is why Wealthfront is the perfect solution for the hands-off investors.

            Here are some of its main features:

            • Variety of investment account options including IRA, Roth IRA, and more
            • Your portfolio composed of 7 different asset classes
            • Automatically rebalanced portfolio
            • Daily tax loss harvesting

            Wealthfront is perfect for people requiring investment guidance, or prefer a hands-off solution.

            Available for: iOS and Android

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            5. Clarity Money

              If you’re staying on top of your budget but want to take your finances to the next level, Clarity Money can help you. Clarity Money helps you stay under budget and build a personalized savings plan.

              Here are some of its main features:

              • Easily cancel subscriptions with one click
              • Synchronize bank accounts fast
              • Transfer money effortlessly between different accounts

              Clarity Money isn’t an app that does it all. But, it does make transferring money and canceling subscriptions fast and efficient.

              Available for: iOS and Android

              6. Acorns

                What if there was a way to quickly gain confidence in investing your money, without too much risk? There is, and Acorns is your solution. With Acorns’s technology, you’re able to make investments as small as $5.

                Here are some of its main features:

                • Automatic contribution option
                • Customized portfolio tailored to your needs
                • Low management fees ranging from $1-$2 per month

                Stop wasting dollars on expensive coffee. Instead, invest them towards a brighter financial future.

                Available for: iOS and Android

                7. Albert

                  Do you budget by only subtracting your expenses from your income? If so, how would you discover any overpayments or extra money you could save? This is where Albert shines, and it does it all free.

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                  Here are some of its main features:

                  • Receive notifications for overpayments, hidden fees, and low balances
                  • An Automatic budget that’s built around your spending and income
                  • Easily track debt and set new financial goals

                  While Albert does offer a paid option, most of its core features are FREE. So, what better option to save?

                  Available for: iOS

                  8. Prism

                    Have you recently forgot to pay a bill because life got in the way? Prism automatically tracks your bills and syncs your bank accounts in one place.

                    Here are some of its main features:

                    • View all your account balances in one glance
                    • Bill due dates are automatically pulled and tracked
                    • Receive early reminders for upcoming bills

                    If your budget is on “fleek” but can’t seem to stay on top of your bills, Prism is your go-to app.

                    Available for: iOS, Android, Windows, Amazon

                    9. Mvelopes

                      Remember hearing about people using envelopes to budget their money? Well, Mvelopes is the new envelope system for this generation. Easily create monthly budgets and track your saving goals.

                      Here are some of its main features:

                      • Connect unlimited bank accounts
                      • Real-time budgeting with auto transaction syncing
                      • Low monthly $4 fee or $40 annual

                      Mvelopes can help you crush debt, save more, and help you stop overspending. With its low monthly fee, it’s worth a try.

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                      Available for: iOS and Android

                      10. Wallaby

                        Most people don’t have time to track their credit card’s changing rewards and interest rates. Because of this, you need help reaping the most of your credit card’s rewards. Wallaby is the app that will help you do just that.

                        Here are some of its main features:

                        • Automatic recommendations for the best credit card to use for each transaction
                        • A friendly user interface, displaying credit cards with their corresponding images
                        • Free to use

                        If you’re using the same credit card to make your purchases, you may be leaving money on the table. Give Wallaby a try if you’re ready to maximize your credit card’s rewards.

                        Available for: iOS and Android

                        Take control of your finances and experience financial freedom

                        Picture yourself staying on budget and saving more money than you’d ever imagined.

                        It took hard work and dedication but you’d finally learned how to manage your money. You have to start taking control of your spending and saving habits.

                        You now have a list of reliable apps that can help you build better money habits, what are you waiting for?

                        Featured photo credit: Pexels via pexels.com

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