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We all know that you don’t just go into debt overnight.


Going into debt is so much more than that. I’m not talking about making a one time purchase of a TV on credit.

I’m talking about the kind of spiraling debt that causes your eyes to water.

How does a person get themselves so far down in the hole that it feels almost impossible to get back out?

Many years ago debt was something that people hardly ever got into but today by the time you hit the age of 18, the opportunity to go into debt is thrown at us from every direction imaginable.

The worst part is that it all seems so normal that no one questions it anymore.

You want to go to University? You need a student loan

You want to go on holiday? Use the credit card that will give you air miles

You want to buy a new laptop? Use an “interest-free” loan to buy it.

If you don’t have your antenna up all the time it would be very easy to fall into one of these traps.

What’s even worse about these credit strategies is that it is usually built on the promise of you being able to save money.

Let’s look at 10 ways that people get into debt without even realizing that it’s going to happen.


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10 Causes of your debt


1. Overspending habits

A lot of us don’t want to admit that we overspend money but we do.

We try to turn a blind eye to our budget in the name of NEEDING something.

We don’t know how to say no to ourselves.

We see something we buy it, we don’t even give it a second thought.

This is how debt occurs. Before you know it your overspending has got so out of control that you can’t afford the things you have purchased as you purchased it all on credit.

Overspending used to be my weakness for many years and this was one of the main reasons that caused us to live from paycheck to paycheck.

Keep an eye on your spending.



2. Misuse of credit cards

Let’s be honest most of us at some point have thought that we could take advantage and play the credit card companies at their own game.

It is a game.

The credit card company gives you an irresistible offer that you just can’t refuse so you sign up with the intention of taking the offer then canceling the card.

What happens when a financial situation pops up and you need some money? That credit card that you just signed up for now looks like it might be able to help you out.

So you use it this one time in the hopes that you will pay it off at the end of the month.

Then another situation pops up and another and another.

Before you know it the credit card is maxed out and you are left not being able to pay off the debt.

You are now in the cycle of credit card debt.


3. Loss of income

What a lot of people fail to realize is that a loss of income can happen to anyone at any time.

You need to think about your finances very well.

If you live your life completely maxed out without any room to maneuver financially what will happen if there is a loss of income?

It happens.

You could be made redundant tomorrow, you could get pregnant and not be able to return to work.

That is why I love the idea of living below your means or living off one income.

You have to prepare financially for every eventuality.

Having an emergency fund will be your net of protection in such an instance.


10 causes of debt that you need to avoid if you want to finally live a debt free lifestyle


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4. Keeping up with the Joneses

If you try to do what the Joneses do you will bankrupt yourself, it’s as simple as that.

You have to learn to be content with what you already have.

Most people miss this point and that is one of the causes of debt.

Trying to have all the things that your next door neighbor has is of no benefit to you.

Your happiness will not be found in material things only in your being content with what you already have.

I can guarantee you that you likely have more than what some people have.

There will always be someone who would love to be in your situation no matter if you think it is good or bad.  There will always be someone worse off than you.


5. Spending your money before you get paid

This is a big trap.

Nothing good can come from spending money before you physically have it.

It’s a very similar situation to overspending.

If you have a good working budget then there is no reason for you to be going into next months money before you have received it.



6. Not earning enough

When I speak to people about finance it starts to become obvious that some people just don’t earn enough to support their lifestyle.

Lifestyle does not always mean going out and having fun. It can also mean the amount that you pay for gas and electricity.

Sometimes no matter how hard to try to make adjustments to your budget you just might not be making enough money to support yourself.

If you find yourself in such a situation then you perhaps need to think about a second job or a flexible job that you can do in your spare time.

Some of the more popular ways to make extra money are:



Survey Junkie

If a flexible job doesn’t suit you then you may need to look for a new job that can actually support you financially or think about asking for a raise in your current position.


7. Bad money management

Without a budget, you are going nowhere fast.

You need to be able to see exactly what money you have coming in each month and be able to see where it is going.

If you don’t have a budget then the chances are that you will be mismanaging your money in some respect.

That might come in the form of spending too much money on your child’s birthday party when you were barely going to make it until the end of the month before this expense.

Having a budget will help you tremendously but in circumstances where you have a big event coming up like Christmas or a birthday party then you should have sinking funds to help you divide up the cost.

It’s much easier to break the payments down rather than waiting until the last minute and getting into debt because of it.

Christmas and birthdays are never surprise events so make sure you plan for them in advance to make sure you don’t go out of pocket.


8. No health insurance

What would happen if you got sick tomorrow?

Do you have the right kind of insurance to cover your costs?

Not having adequate health insurance is a huge cause of debt in some households.

According to PBS, about 44 million people in America don’t have any healthcare insurance at all.

We bank on the fact that we will never get sick enough that we will need insurance but the truth is that it is not something that we can fully control.

If you don’t already have insurance then it something you should definitely start thinking about.


Having no health insurance can be a cause of debt

One of the causes of debt is having no medical insurance


9. Expanding family

Do you have enough money that your family will be supported once your family starts to grow?

This was one of the things that caught my family off guard.

We had no savings, I was made redundant (unfairly) and we had all of our children very close together. We were left to start living on one income which we were not prepared for.

This left us living paycheck to paycheck feeling like there was no way out.

If you know that you want to have children then you need to plan towards that.

Don’t just let life happen to you, make a plan now.


10. Lack of financial knowledge

This is the biggest cause of debt for most people.

Yes, the other points are really dangerous but this is the worst because financial knowledge gives us freedom.

The more you learn about money the more success you will have concerning it.

You won’t get yourself into trouble anymore.

Take the time to learn about personal finance.

You might think you already know everything but there is always more to learn.

Do you understand how inflation works and how it can affect you?

These are important things that you need to understand.

Soak up all the information that you can about finance now before you make any more mistakes.


Finance education


Final thoughts on the causes of debt


You might feel horrible about the amount of debt that you have right now but it is not the end of you.

You can make some much needed necessary changes today just by starting with your mindset and how you look at money.

I suggest you begin with making a budget and taking a really good look into your debts.

Never give up because today you have had your eyes opened to the truth about the causes of debt.


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Causes of debt


10 causes of debt that you need to avoid if you want to finally live a debt free lifestyle