For many, falling into debt comes as a surprise. They do not expect to go from having everything under control to finding themselves in a situation where they are struggling to keep up. However, there are many reasons that cause debt and it is not as uncommon as some think. The following are the top five reasons Australians find themselves in the red:
Unfortunately, staying healthy has its costs. Even with Medicare, private health cover and other various medical solutions, if you or someone you care for has a disease or injury, the bills can quickly add up. In fact, medical costs account for the majority of bankruptcy cases, with 62% of personal bankruptcies related to medical expenses, as found by Harvard University.
Job loss or unemployment
Those searching for jobs or unexpectedly terminated from their current workplace often struggle with debt. This is made harder on those with little savings and no pay-outs. With the current job market looking grim for Australians, unemployment can be disastrous.
Poor money management
Too few of us are taught how to budget and set a monthly spending plan. But without one, your money could be going anywhere and you could be spending hundreds unnecessarily each month. All it takes to fix this is to write down your regular expenses and your income and find the best way to make the two work. It can be a powerful feeling to have control of your money!
Statistics show that over half of marriages end in divorce. It may sound a bit grim but with divorce rates rising, this has quickly become an easy way to get into debt. Legal fees, child support and the sudden change to a one-income household sees many run into debt in a matter of months.
Lack of savings
While it can be hard to put money aside after all the bills are paid and money has been delegated for food and other essentials, even a little can go a long way in the future. Saving just $20 every pay can add up to hundreds over the course of a year and is a simple solution to avoiding debt (and many of the reasons for it on this list) if something unexpected happens!
If you are worried you may be in danger of debt or bankruptcy, or find yourself already struggling and need help, talk to the experts at Professional Debt Solutions. Don’t let it get worse, talk to our friendly and understanding staff and get your finances back on track.