It’s easy to paint everyone who is in a bad financial situation with the same brush. It’s their fault, you might be thinking, as they haven’t looked after their finances at all. But the truth is a little grayer than that. In fact, many people fall into debt through no fault of their own. Sure, there are those that spend way too much on their credit cards, but it isn’t always the case by any means. With this in mind, here are some of the unavoidable causes of debt that could, potentially, hit any household at any given moment.
Medical costs
You can spend a lifetime paying into a health insurance plan and looking after yourself, but for many people, bad luck plays a significant role. Sometimes your genetics kicks in and results in a devastating and complicated condition. Maybe you have an accident and need expensive treatment which your medical insurance only covers a small proportion of. The point is, you never know what might happen, or how tight your medical insurers will be when it comes to the crunch. And the result for many households is enormous medical bills and big debt trouble.
Cost of living
Inflation – when it occurs – can hit low-income families exceptionally hard. And it only takes a couple of percentage points for a family that can get by to turn into one that can’t. Food prices, energy costs, rental rates – all can go up significantly during periods of inflation and the simple truth is that not everyone can afford it.
Other people
The popular theory amongst most people is that if you mind your own business, no harm will come to you. But this is simply not true. Take bad drivers, for example. You can’t guarantee that even if you always drive safely, they will never hit you. And if they do, you can expect significant injuries. In situations like this, it’s always best to look for the top rated personal injury lawyers in your area to ensure that you get a vigorous defense. Don’t forget, every cent you lose in compensation payments is money you will need to borrow to get your life back on track.
Lack of insurance
Not everyone can afford to insure everything. They have to make stark choices, whether they are a low earning family or a small business who skips on their general liability insurance because they are running at a loss. And if you can’t afford to keep up your payments, you end up with no insurance at all, meaning you have to fork out massive amounts of money to replace or repay whatever is needed. And the result is even more debt, and going deeper into the vicious circle.
Lack of knowledge
Finally, is it any wonder that so many people struggle with their finances when the subject is barely touched on at school? Financial products and theories are complex, and if you don’t have the money to pay for an expensive and highly qualified accountant, is that really your fault? If you don’t know any better and receive a pre-approved credit card, there’s every chance you will see it as free money.
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