Although many people are quick to convict those who owe substantial amounts of money, sometimes debt is completely unavoidable. If you lose your job, as many people have done recently, you suddenly find yourself without a way to pay for all the expenses that you previously paid.
Your cost of living suddenly becomes a problem. It takes time to find a new job, the salary may be lower, and you may not qualify for unemployment income while you are between jobs. It is very easy to be left with expenses that you cannot cover.
While unavoidable debt is perhaps the scariest of all, there are far more people with avoidable debt in the United States. For every person with unavoidable debt, there are ten people with avoidable debt.
Those with avoidable debt rely on credit cards to stretch their income only to end up with excessive credit card debt due to interest rates and late fees. Eventually, they find it difficult to keep up with all these expenses plus the daily needs of the family.
Retail purchases are a common cause of avoidable debt. Many people spend their money recklessly when they are sad or bored. I found that the less money we had, the more I wanted to spend to make myself feel better. Spending money can be a way to feel better about circumstances beyond your control, but it only adds to the situation. Nothing good happens when you take a bad situation and make it worse with reckless spending.
But it’s not just people with limited amounts of money who struggle to control their spending habits and avoid avoidable debt. We have a pretty good family income and that made no difference to our situation.
Irresponsible spending and inadequate budgets will deplete any level of income quickly, regardless of how large it is.