23 Brutal Ways You Are Causing Your Own Debt Problem & How To Turn It Around


Debt is a growing concern around the United States.  The upsurge in the cost of living, the loss of jobs or jobs that are only paying minimum wages.  These conditions have consumers leaning more toward credit purchases or credit card spending.  Young adults grew up in the technology age and believe they need to stay on top of the new technologies; whether with computers, iPhones or tablets.  It’s very difficult for many of these people to realize they must stop being brainwashed into believing every new device is better than what they already have.  Many people are addicted to credit card spending and even collecting credit cards.  We are offering solid advice for people in debt to take control of their spending habits and start preparing for their futures:

1. Not Having a Budget:

Studies and surveys have shown that most adults do not have a budget in order to keep track of their spending.  If you are not keeping an eye on what you are spending, you are going to end up in debt, very easily.  If you are a young adult, you were brought up in the technology age; many of you were given the latest gadgets by your parents.  You, probably, had little regard how these items were being paid for.

Solution: Turn Your Expenses Into Good Budgeting.

You should go back over your bank statements and/or credit card statements for the past few months.  You will see how you are spending your money.  You should separate needed expenditures such as your mortgage, rent, utilities and food and unnecessary expenditures such as the newest Mac computer, frequent visits to the shopping mall or the highest end iPhone that is no different than the one you already have.

Once you separate the two categories, you will see why you need to cut out some of the unnecessary expenditures that are putting you in debt.

2. Using Your Credit Card For Vacations & Luxuries:

Vacations are important for added relaxation and get you out of the chaos of everyday life.  Unfortunately, without proper planning, you will turn your vacation into another carrier of increased debt.  Surveys have shown that 68% of people who go on vacation use their credit cards to pay their way.  Half of those people will end up in debt.

Solution: Plan ahead, you can save up for your vacation and not rely on your credit cards.

One of the biggest mistakes using credit cards, you will probably only pay the minimum amount each month.  In the long run, you will be paying a great deal more for your vacation.  It would be really nice to have the latest, greatest tech gadgets on the market, but they are expensive.  If you have not saved up for one, stick with the one you already have.  The interest in paying off high-end items is going to kill you!

3. Not Knowing The Difference Between Your Needs vs What You Want:

If you are living in bad spending habits and constantly in debt, you need to sift through what you are spending money on and whether it’s necessary or not.  It’s very easy to believe you work really hard and have a right to a high-end expense because you deserve it.

Solution: Again, if you cannot afford it, save up for it or let it go. 

If you stick to a budget, cut back on spending habits and use the extra money to save up for something special, you will appreciate it more.

4. You Cannot Say “No” To Your Children:

If you are a young adult who grew up in the technology age, you probably had computers, iPhones, etc.  In turn, when you have children, saying No is going to be tough to do.  In many cases, parents will rely on their credit cards to buy their kids whatever they want and end up in financial debt.

Solution: Let your kids know your budget.

Parents know it’s very difficult to tell your kids they can’t have everything they want. Even if it’s something like a school event, an instrument for the glee club, etc.  There are times you must let them know what works with your budget and what doesn’t.  There is an upside, when your kids understand that living on a budget is a part of life, they will grow up having more responsibilities over their own expenses.

As kids grow from toddlers to young children there will be school activities. Prepare now by saving up for these events so your children can participate with their classmates.  It’s a win – win situation; you will be able to give them the money for an instrument, a football uniform or a field trip and not use your credit cards.  Kids participating with their schoolmates is a very important step in growing up.  You do not want to deny them these wonderful opportunities, so be prepared ahead of time.

5. Not Discussing With Your Spouses’ Spending Habits:

If you never address money expenditures, you probably won’t have a clue what your spouse is spending.  If either of you have developed high debts, this is going to hurt both of you financially.  There are nine states that are known as community property states:  Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.  If your spouse creates a great deal of debt, you are responsible that debt as well.

In other US states, you are not responsible for your spouse’s debts that in their name.  If it’s a joint debt, you are both responsible for payments.  Even if the debt is not in your name, you could be prevented from getting future loans.  If you were hoping to purchase a home in a few years, the weight of your spouse’s debt could keep that dream from ever happening.

Solution: Have an open conversation about your spouse’s spending habits and debts.

The bottom line, you should both know what each others’ spending habits are and if one is a little out of kilter, figure out how to get it under control.

6. You Do Co-Sign On Loans For Other Person:

If you have a friend or family member that does not qualify for a loan due to no credit or poor credit, helping out could hurt you in the long run.  Unless you know they are very responsible and will come through on a loan, lenders will come after you for the payments.  This will take a huge toll on your credit score, add to your debt and cause bad feelings between you and your friend or family member.

Understand, co-signing places the same responsibility on you as the person who needed the car loan.

7. Not Being Cautious When Borrowing Money For A Business:

If you are planning to start your own business, do your homework before jumping in head first.  Yes, it’s perfectly normal for people to borrow money for their startup businesses.  However, if you do not do your homework first, decide if this is a good venture or not and it fails, you are stuck holding the bag for paying back the loan.

Compare business loan lenders online here.

That does not mean you should never take out a loan for a business venture.  Keep in mind,  only half of startup businesses will make it past 5 years; according to the Small Business Administration.

Solution: Do a thorough research before you start a business.

It’s imperative to do all your research, make a long-range plan and talk with knowledgeable people to help you decide if this is a good investment or not.  Always remain realistic when considering the revenues, liabilities, and expenses that will incur for starting a business, then decide whether it’s worth pursuing.

8. Incurring More Credit To Pay Off Your Debts:

Applying for a debt consolidation loan can be positive to take various debt balances and place them into a single payment at a lower interest rate.  But doing so can also backfire if your spending habits are not altered.  Taking out payday loans might seem like a good idea at a given moment, but the interest is really high and you must be prepared to pay it back on a specified date.  If you can’t, you’ll be eaten alive in late charges and increased interest rates; putting you in worse condition than you were before.  You could find yourself still paying these loans off, 10 years later.

Solution: Another avenue is obtaining a loan with low interest to pay off your higher credit card debt or other debts. 

Keep in mind, you are still running the risk of adding more debt to those cards unless you close the accounts.  Your best bet, if you can, take that money and put it into an account to pay off your debts instead of adding to the debt you have already incurred.

Find debt consolidation loans here.

9. Living Outside Your Means:

This is a hard place to be because you love your home or apartment but you just cannot afford it.  Whether your mortgage is out of control or the cost of living in your area is steep, you are going to fall deeper and deeper into debt.  There are too many cases of couples refinancing their mortgages and taking out loans in order to stay in their upscale neighborhoods.  Unfortunately, many of these couples will end up losing their homes or fall into bankruptcy.  Misguided egos will have some people borrowing against their homes in order to have a luxury vehicle.  This all adds up and, at some point, you must make a decision to live from pay check to pay check or consider living somewhere else.

Solution: Understanding Your Income vs Your Lifestyle.

If you are trying to live up to your wealthy neighbor, it’s time you take a reality check.  Everyone, at some point, must wait until they can comfortably afford some things.  Keep striving in your career, climb the ladder and then enjoy the things you couldn’t before.

10. The Old Adage – “Keeping Up With The Jones’:

Too many people feel they are not as good as their neighbors if they can’t afford the same toys they have.  It’s very difficult to keep up with every gadget that hits the market, the latest car with all the bells and whistles, and the endless barrages of the technology age!

Ask yourself, why do you need the latest iPhone when you just bought one last year?  Are there any real differences between the two?  Most people don’t have an answer, they just “believe” they must have the latest and greatest!  Between commercials and the chatter of friends, we are often lead to believe we need these things.  Your friends have invited you on a weekend vacation to Galveston Island, you cannot possibly say no – so you pull out your credit card and pay for the trip!  Once again, you are spending money you just don’t have and will never have enough money for a rainy day!

Solution: It’s up to you to control your spending and learn to say no! 

Somewhere, down the road, you are going to thank yourself for having the discipline to blow off these “must have” gizmos and have a savings account instead.

11. You Overlook Some Hidden Costs:

Almost everything you purchase has hidden costs from sales tax to maintenance costs. That newly purchased AUDI will need tune-ups, oil changes, car insurance and in some cases replacement parts.  The more expensive a vehicle, the higher the hidden costs will be.  OK, you decided to buy a Mac computer for the first time – you will have to purchase all the software that only runs on Mac because the software on your PC is incompatible.  All these extra costs are going to dig into your budget.

12. You Have Totally Underestimated Your Expenses & Future Income:

Many people fall under the guise that if they are earning a good salary,  they will earn the same next year, or better yet, get a raise.  With the cut back of jobs, the escalating cost of living and the possibility of losing your job,  you cannot predict the future.  What if you or your spouse becomes physically incapable of working?  How are you going to keep up your lifestyle unless you have put money aside for that “rainy day”.  If you plan for possible unforeseen issues, you will probably be able to fare relatively well.  On the other hand, if you live under the belief that you will always be fine, you could end up in a financial train wreck.

13. You Would Never Ask For A Hand Out:

No one really likes to admit they need help, even though they need all the help they can get.  You do not have to try and figure things out on your own.  There are many very professional, knowledgeable people available to help you with your debt issues.  Before letting things get out of control, reach out to others who can help you get back on track and get your debt under control.

14. You Have Absolutely No Plan For Developing A Financial Plan:

If you are serious about getting out of debt, you must sit down and form a long-term plan to live by in order to eventually live debt-free.  Working longer hours or putting in for more overtime might sound good, but to what avail?

Solution: Hire a book keeper, financial adviser, or CPA

Get with someone like a book keeper or financial adviser who understands how to control your spending habits and help you become more responsible for your budget. This will be a great deal more beneficial than killing yourself at work.

15. Your Middle-Aged & Haven’t Saved:

When you are young, in your 20’s, starting a savings plan is the farthest thing on your mind.  Unfortunately, time passes by very quickly and the next thing you know you are hitting your 40’s.  You have spent two decades spending, spending, spending and don’t even have a decent savings account.  You have a pile of debt and wonder where all the money went.  While you are young, you should have a savings plan, after all, you want to retire some day.

16. No Savings For An Emergency:

When emergencies happen, if you don’t have the funds to cover them, you’re in a really bad place.  Counting your pennies to come up with a new tire, because you don’t have a spare, can be quite a predicament!  What happens when you’re sick and have to pay your end of the medical bills?  You got it – you’re going to use a credit card!  If you set some money aside, with each paycheck, you will be pleasantly surprised to discover you can use cash to pay for that new tire and maybe even pick up a spare along with it!

Get Emergency Loans Fast Here.

17. Not Paying Attention to Small Purchases And Late Fees:

Your expenditures can add up a lot faster than you can imagine.  Going out to lunch every day or paying for your Pay To View a few times a week adds up.  If you are constantly charging for fast food or renting video games, or you sometimes incur late fees because you can’t return your movie dvd on time, you might think these charges are insignificant, but that’s just not the case.  Over time you are spending a great deal of money on small purchases and you are nowhere near paying off your debt.

18. You Always Think “I’ll Worry About My Debt Later On”:

You’re not going to be in your 20s forever!  Believing you can correct your debt, later on, is just foolish.  If you get married and continue your bad spending habits, just how long do honestly think your spouse is going to put up with it?  You might just find yourself in divorce court!  Think clearly, the next time you think you need the same Gucci Handbag as your friend, ask yourself why?  You know you don’t need it and it’s more money out of your pocket.  Stop feeding your enormous debt and get rid of it!

19. Not Understanding Your Gross Pay vs Your Net Pay:

Your gross pay is the amount you have earned before taxes and your net pay is what you have left after taxes have been removed.  If you are a freelancer, you are responsible for paying your own taxes, but are you?  Do you have an accountant that has set up a payment plan to the IRS?  Many freelancers opt to make quarterly payments instead of the bulk sum when income taxes are due.  If you are not taking the proper amount of taxes out of your paycheck, then you are spending more money than you actually have!

20. You Are Going To College:

Colleges are quite expensive and the cost increases every year.  Most students will have to take out student loans to pay for it.  In many cases, they will get part-time jobs to bring in cash for each semester.

Solution: Find work study opportunities or consider attending community college.

This can be hard to do, but if education is important to you, which it should be, find ways to offset the rising expenses.  You might have to start off at a community college to earn credits and scholarships before moving on to a university.  Find out what works best for you and take it one step at a time.

21. You Are Not Financially Illiterate:

Too many people do not understand how money actually works.  They don’t understand how important it is to save and invest for that rainy day or why they should balance their checkbook.  Unfortunately, when we are in school, there are no classes on the expenses of life and how to be responsible.  Yes, you are responsible for your own life and how you handle your money and your expenses is critical.

Solution: Don’t rely on  a future windfall by spending money today that you won’t have until tomorrow. 

What if something happens and that windfall doesn’t happen?  Never spend what you don’t have!  Financial mistakes will become very expensive and more difficult to resolve.  You need to educate yourself on your finances and how to stay responsible for your spending.  Yes, you do have a life but life can be very expensive! Check out MoneyLend.net’s Guide to Financial Literacy Here.

22. The Fear Of Change:

Human beings are creatures of habit and if you have always lived off credit cards, it can be very difficult to stop it.  If you trade in your car every three years, or so, you know you are heading into  a new car loan, but that’s to be expected!  It’s the unknown that scares most people.  Until you give it a chance, you are not going to know there is a whole world out there of people who are responsible for their spending habits, cutting up their credit cards and keeping their cars for many years to come.

23. Gambling Is A Major Addiction:

Many people who gamble believe they can’t lose!  Gambling Casinos are not in business to let everyone win.  If you do not have the funds to constantly gamble – don’t do it!  For many people, gambling is an addiction that can lead to losing their homes, personal belongings, and tear their families apart!

In A Nutshell:

There are so many reasons why people fall into debt.  They continually spend as if tomorrow will never come, are addicted to things, want to keep up with their neighbors or just do not understand money!  Sitting down and creating a budget might not be on the top of your list of things to do, but it is important that you take charge of your debt for a better future.

There will always be an urge to spend money on the latest gadgets, newest trends or eating out each night because we hate to cook.  We all have to focus in on what makes us spend instead of saving.  Once you are able to see your weaknesses, you can turn things around and stop, think, and get out of debt – permanently.



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