Top Causes of Debt

If you're serious about paying off your debt, then it's important to know exactly what put you in this situation in the first place. By knowing what caused your debt, you can more effectively avoid those actions in the future. Here's a look at some of the top causes of debt problems:

• Unemployment - Throughout the country, unemployment has become a major issue for people of all types. From business executives to department store employees, the country's recession has hit everyone. Extended bouts of unemployment have put thousands of people deep in debt.
• Payday Loans - Over the past several years, payday loans and cash advances have become increasingly popular across the nation. Unfortunately, they've also put a lot of borrowers in debt. With their high interest rates and short terms, being less than financially responsible with these loans will lead to trouble.
• Poor Money Management - Do you struggle balancing your budget and managing your finances? It's a common problem, but it can also be a very expensive one. Fortunately, one of the advantages of debt consolidation is that you get access to a professional money management service.
• Family Matters - For many people, debt is often caused by issues within their family. Anyone who has ever gone through a divorce knows that the financial ramifications can be far-reaching. An unexpected pregnancy and other issues can also play a major role in causing debt.

• Credit Cards - Perhaps the most common cause of debt has long been credit cards. Just about everyone has multiple credit cards today and while they offer an unmatched level of convenience, their high interest rates and pricey fees are a quick path to debt.
• Gambling - While most people would agree that there's nothing wrong with the occasional trip to the casino, a gambling addiction will almost certainly leave you with an insurmountable amount of debt.
• No Savings - Ask any financial advisor and they'll tell you that maintaining some form of savings should be a top priority. A savings or rainy day fund can be a life saver when a surprise expense pops up or you lose your job. Without any savings, you're forced to turn to credit cards or other high interest borrowing.
• Lack of Financial Understanding - As it turns out, the lack of a financial education can definitely lead to debt. While you certainly don't need to be an expert on economics to be financially successful, having a basic understanding of how it all works can help your money management.
• Medical Expenses - If you don't have health insurance, you probably already know just how expensive medical expenses can be. Even if you have a decent health insurance policy, medical expenses tend to creep up on us and are rarely cheap.