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10 Reasons Americans Keep Falling Back Into Debt

It’s easy to pinpoint the cause of debt if there were circumstances beyond our control, like job loss or large medical bills due to a serious illness or injury, but what’s less obvious to many Americans is why they keep falling back into debt because of our own financial mistakes.  Let’s talk about the reasons why we repeatedly struggling with unmanageable debt.

1. We just can’t afford to live where we are. It’s a hard thing to accept, but that home or apartment where we’re currently living simply may not be financially affordable. To lower your debt, consider relocating.

2. We failed to identify wants vs. needs. When we work hard, it’s easy to fall into the trap of thinking: “I deserve this,” even if we can’t truly afford something. Take a hard look at your spending choices and see whether you’re spending too much money to “wants” vs. “needs.”

3. We grossly underestimated future income and expenses. Don’t assume that because you earned X amount this year, you’ll earn the same amount next year. Unfortunately, no one’s income is guaranteed and the cost of almost all goods and services always rise.

4. We failed to understand hidden costs. That new Game Console you’re considering? It’ll cost $400 for the console plus $30 per games –If you don’t consider maintenance or ongoing ownership costs into account, these extra bills can get you into debt.

5. We haven’t reconciled our lifestyle and income. Maybe you love to travel, but in really you don’t have the cash flow to do it without putting those trips on your credit cards. If you’re living on a tight budget, it’s time to accept that some things have to wait until you can afford them.

6. We’re not saving money, and always using credit cards to bail us out. If we never sock away any money, you’re almost guaranteed to keep getting into debt.  Any time the smallest emergency occurs, you have no cash cushion to deal with the situation.
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7. We’ve never asked for financial help. Lots of people are simply too proud to ask for help – even when it’s obvious that they really need it. Instead of trying to go it alone, or “figure things out” by yourself, get some professional help for tackling your debts.

8. We have no debt elimination or financial plan whatsoever. You may think that work harder, putting in more hours, or getting more overtime, are great ideas, but to what end? If you’re serious about eliminating debt once and for all, you need a long-term plan and a financial blueprint to live by that will keep you debt-free.

9. We’ve underestimated the amount of time you have. If you’re young, you may think: I’ll get serious about my finances later.’ But this kind of mindset is shortsighted and can cause you to spend recklessly. Sooner or later, when you’re facing a pile of debts, you’re going to start wondering: ‘Where did all my money go?’

10. We underestimate the impact of numerous “little” things. Debt can snowball before you know it if you allow numerous “little” things to pile up. So watch out for lots of low-cost things and “small” monthly expenses that eat away at your budget. All those can wind up on your credit cards and increase your debt load.