Personally, I think there are two types of people in this world: those who never feel the need to worry about debt and those who are constantly scared that debt could impact their lives forever. Which group is the more sensible group when it comes to debt?
As it turns out, it’s the people who do constantly worry about debt who come out on top because they should be prepared for it if it does come knocking.
You probably think that if you don’t take any unnecessary risks and manage your finances carefully, you’re not going to end up in debt, but that’s not true. There are a number of causes of debt, some of which can be unavoidable.
So, what are some of the main causes of debt?
You’re far more likely to experience debt if you have a disability and there are a number of reasons why this is the case.
First, people with disabilities often struggle to find work. This is true regardless of whether their disability actually impacts whether or not they can work and that’s because of the stigma attached to disability. Unfortunately, people who have a disability are often perceived to be unable to work. Or at least, unable to work on the same level as someone who doesn’t have a disability.
There are also medical fees that come with a disability. If you develop a disability later in life, you may not be prepared for the high medical costs from procedures, medicine and even doctors’ appointments that you may need far more regularly than a typical individual. You can start to see the costs associated with health crises mounting up, but it doesn’t stop there.
On top of increased medical expenses, you might also have to pay for changes to your home so that you can live the highest quality of life. This will be particularly true if your disability has impacted your mobility. You could spend thousands putting a lift in your home, or you might even decide to buy a bungalow or a manufactured home to save you the trouble of getting up and down the stairs.
You might think that you’re lucky you don’t have a disability, but a disability can strike you at any time in your life. In fact, people who are overweight are far more likely to suffer from a disability, so this is certainly something to consider next time you avoid visiting the gym.
So, how do you handle this particular cost? Well, believe it or not, a lawyer might be the expert you need in your corner. A personal injury insurance settlement can provide you with the money you need if your disability was caused by an accident that wasn’t your fault. And, even if you weren’t involved in an accident a lawyer can make sure you get the social security benefits that you will need to stay out of debt.
It’s easy to assume that if you work hard and always give your best, you will never experience redundancy, but that’s just not true. Businesses close and employees are let go for a variety of different reasons, and any loss of work can leave you completely vulnerable. How do you handle this vulnerability?
Consider looking your employer or potential employer and assess what they offer if you are let go. Hopefully, they will provide you with enough pay to survive for at least a few months without work. If so, then you should be able to get by without going into debt during that time. The problem is that it typically takes longer than a severance package usually provides for. As such, you need to have a long term plan in place. This is where savings will come in handy, but if you don’t have any due to a low income, you’ll need to take other steps.
Make sure that you are controlling your spending more than you usually would by setting up a bare bones budget because you might reach the point where you should only be buying essentials. Don’t worry, if you get through this stage, you’ll be able to bounce back to the point where you can once again afford more of life’s little luxuries. To do this, we strongly suggest taking up a side hustle while you’re trying to find work; the pay you can get from doing this won’t replace your income, but it can help stabilize your finances.
One of the greatest contributors to debt in America is medical bills; in fact, medical bills are the number one reason why Americans file for bankruptcy.
The problem with medical bills is that they are impossible to predict. You don’t know whether you’re going to need an expensive treatment for a medical condition one day so you can’t prepare to have the money readily available.
This is why you need to make sure that you are on the right health insurance plan. With the right health insurance, you can keep your access to the best medical care and also make sure that the bills don’t grow beyond your control.
If you do find yourself facing a huge medical bill due to a necessary treatment, you might consider contacting a financial professional for help or go directly to medical offices and hospitals to help you handle the situation. It’s still going to be a weight on your finances, but at least that way it’s manageable.
As you can see then, there are a number of causes of debt completely beyond your control. But if you take this advice, you can take control of the situation.