Millions of Americans suffer from too much debt. The reasons that this occurs is different for each individual. However, there are universal reasons that individuals fall into the debt trap. Below, we will discuss five of the most common ones.

1. Divorce: When individuals divorce, assets have to be split and there is less income to pay the bills.  Being forced to support a family with one income can be very difficult and thus many individuals have to rely on debt to make ends meet.

2. Decreased Income: This can happen for a variety of reasons.  One spouse or partner may lose their job or may become sick and unable to work. The same expenses remain, but there is less money to cover them.  When this happens, it is very easy to become mired in debt.

3. Not Properly Managing One’s Money: Many people attempt to get by without a budget. While an individual may be able to skate by without keeping track of their finances, eventually this type of lifestyle will catch up with them. 

   Most individuals will find that if they look carefully at the amount of money that they spend, that much of it is wasted and includes purchases that one doesn’t need or that they don’t even remember. Many people will be surprised at how much easier it is to meet all of their obligations, plus have money left over for little bit of fun when they budget. If they refuse to budget, they will often times have to go into debt to cover emergencies and unexpected expenses.

4. Being Underemployed: Millions of Americans work full-time jobs, and even take on second job and still aren’t able to make enough money to support their family. This is due to minimum-wage or low paying jobs that don’t provide enough money to feed, clothe and transport an individual or a family. 

5. Being Underinsured: Medical expenses are one of the leading reasons for bankruptcies and money woes. Often times when people are underemployed they are also underinsured.  If a medical emergency arises and there is either no insurance or not enough insurance, these individuals are forced to pay those medical bill and there is no way that they can afford to do so.  The amount could be hundreds of thousands of dollars.  Even having to pay a few thousand dollars or a few hundred dollars at one time, can put a strain on an individual or a family’s budget, subsequently, forcing them to use credit cards to make these payments.  If an individual is only able to make the minimum payment, they could end up having this debt for decades and still not be able to fully pay it off.  If the individual has to use credit to make purchases in the future, one could see how it could be very easy to get into so much debt, that it is impossible to get out of it. 

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