The sad reality of the modern lifestyle is that a majority of the population is in debt. It can be a mortgage, study loans, credit card bills, medical bills and the list goes on.
The fact is that in this day and age more people in debt than ever before in history.
It starts right with the student loans and once a person enters this vicious cycle, it is hard to escape. I find that the major cause of debt among people is the lifestyle that people want to live. We want our own apartment, a bigger car and send our kids to private schools. These aspirations, although very realistic, but with the unreliable job market and the easy availability of credit, we expose ourselves to risks which could make our lives very difficult.
Firstly, there are not many well-paying jobs. Secondly, the jobs that we do manage to get don’t pay well enough. And then, lo and behold, people get married, have kids and more often than others get divorced.
Divorce is another thing altogether It is a pricey affair and not just emotionally but also financially. Those long billable lawyer hours, settlements and custody are a sure-fire way to knock one down a couple of notches.
I was a kid once so I know that there were a couple of things that I had to have and survival without those wouldn’t be possible. Although I do realize now what an unnecessary requirement and inconvenience that was.
Then we take into account the bad financial management of our homes. This is in fact among the top reasons for debt, and no matter how much we abhor finance, we should know the basic know-how and management skills.
Credit cards, according to me are a two-way sword. On one hand, they provide us with money in case of emergencies and in international travels. However, who can resist the temptation of splurging a little?
The result of all these expenditures is increasing debts with no easy way to escape
Let we assume that you do not splurge and have expertly managed your finances, savings is an essential part of it. One should not leave his chances on luck and have a secure nest-egg. God forbid for a medical emergency as the expenses blow through the roof if all the other expenses still haven’t.
Eventually, the question arises of how to escape these debts.
The solution is not that hard as the problem seems. It simply is to limit our expenses within our modest incomes and always try to keep some spare. There are some expenses that are unavoidable, so always be prepared for such unforeseen circumstances. That way you can escape huge debts. The reality is that we need the loans and credits offered by the bank for a comfortable life and for education or business purposes.
The only possibility to eventually escape is cycle is to plan your living standards and expenses and even if there is a temporary decrease in your income, adjust your expenses immediately.
Resources:
https://www.forbes.com/sites/zackfriedman/2018/07/11/personal-loans-consumer-debt/