Common Causes of Debt

​Debt is everywhere. It is easy to assume how people get into debt, but there are many common reasons someone might face a financial struggle. 

There is no shame in being in debt – in fact, one report has shown that 77% of Americans are in some kind of debt, and the total of all US household debt reaches $14.56 trillion over around 120 million households- so you are not alone.

This piece will discuss some of the common causes of debt and how you can help yourself manage your financial situation.

​Buying a House or Car

​Important life events such as buying a house can put you in immediate debt, which can take years to clear. Of course, what other options do you have? You need a place to live. Advice that may be applicable here is before purchasing a home, be sure you can afford the monthly repayments on the property you have chosen. If not, see if you are able to downsize as comfortably as possible.

Cars are just as important in this day and age, especially if you have a large family. Public transport can be even more expensive and time-consuming than driving, and some do not feel safe, so investing in a car can seem like the better choice. It can be hard not to want to drive something flashy with all of the mod cons, but choosing something reliable that can get you from A to B will be the best bang for your buck without having to put yourself in any unnecessary debt. 

​Low Income or Unemployment             

​Sometimes wages just do not cover the basic costs of living, which is why it can be easy to start popping things on a credit card. There is a food shop here, a tank of gas there – it all adds up and pretty fast. Unfortunately, if someone is on a low income or is unable to work or find work, debt is often only around the corner, and it can feel like your fault even when it is not.

Some tips that might be helpful in this area include looking at what benefits you are entitled to and where you can get additional help. There are resources available to help people, often non-profit, and other professionals can help you manage factors such as finances. Getting out of debt can feel impossible in a situation like this, but a debt consolidation loan from a company such as OneMain Financial can help rid yourself of debt in a manageable way. A debt consolidation loan can consolidate your payments into a single low monthly payment that’s much easier to manage financially. Bear in mind that debt consolidation loans may have origination fees or interest rates and terms that could end up costing more in the long run.

​Divorce or Separation  

​Going from two lots of income to only one can be quite a shock to the system and the bank account. This crippling change can leave those who are already committed to paying for a house or a car fall into dire straits overnight. Consider speaking to debt support charities and looking for other resources that could help you if you find yourself in this situation – you do not have to do it alone.