The Real Reasons You're Drowning in Debt

By Amanda Geering

Debt is one of every parent’s worst fears. It threatens your financial ability to look after and provide for your children, and that initself is enough to make you never want to experience it. But unfortunately, getting stuck in debt is a lot easier than people seem to expect. People think it will happen only if you’re terrible with money and never pay attention to what you’re spending. In fact, though, even the most minor of decisions can end up leaving a huge negative impact, so it’s important to know how to avoid that as much as possible.

Here are some of the most common reasons.

No communication skills.

If you have a partner, it’s essential that you both communicate openly about your finances, especially if you’re living together. You should always feel as though you can openly bring up your financial situation when you need to – even if there isn’t an issue – and talk about your different spending styles, future goals and your problem areas. Discuss budgets and figure out who’s covering what costs. Will you alternate, or will you split everything down the middle?

Underemployment.

If you’ve just come out of a job, a lot of you may believe it will only be temporary – a couple of weeks to a month, max – before you find something else. While this positive thinking is encouraged, you may not be thinking as realistically as you should. Sometimes it just doesn’t work out how we had assumed, whether that be lack of work available, or motivation, and this means you’re not making an income, but still have monthly expenses to pay. Although you can’t always avoid bad situations, you can work your butt off to make sure you’re never left without an income.

Loans.

Taking out a loan can seem a good idea at the time, whether you need to put down a deposit on that house, or the car, or the holiday. The problem is when you take out multiple loans to feed into your wants and overlook the priorities – like paying your bills on time every month, ensuring there is food on the table, and paying off your existing loans.

Not saving enough.

One of the easiest ways to fall into the debt trap is by not saving up enough, if anything at all. As soon as you get your paycheck, the first concern should be putting the money aside to cover the monthly bills. Then whatever is left over, leave ten to twenty percent for your general spending money, and put the rest into another account that isn’t allowed to be touched. If you do that every month, you’ll make it to the end of the year with a wonderful number looking back at you.