3 Common Reasons Why You Find Yourself in Debt

A large number of people feel as if they will never pay off their debt. That’s about 13% of Americans. Others believe that they won’t be able to pay off their debt until they’re about 71 years old.

If you’re one of these people, it’s time to ask yourself what caused you to fall into such a situation in the first place.

Here are 3 common reasons why you find yourself in debt:

 1: No Idea How Much You Owe

Financial planners usually say that people in debt do not know how much debt they are in. This makes it impossible to make a plan to reduce or eliminate that debt. This causes them to not know how long it will take to pay their debt off or how it is actually preventing them from reaching their goals. So, make a list of all the debts you have and start tackling them one by one.

2: Paying Only the Minimum

If you make minimum payments, then there is no way you’ll be able to pay off your debt any time soon. Not only will you have to pay the amount you’ve spent but also the interest that continues to accumulate with each passing month. Now even if you pay a little more than the minimum balance, you can pay off your debt much faster and avoid a lot of interest as a result. This will stretch your budget but it is worth it if you want to get out of debt faster.

3: Overpriced Mortgage

If you feel that your mortgage payments are a bit too much to manage, then it’s time to downsize to a smaller home. You can even look for a roommate or rent out a place instead. If you do have the money, then you can either increase payments over a 30-year loan or reduce it to a 15-year loan too.