All of us know
that debt can lead us to very disastrous effects in life.
And yet, most of
us are stuck in the pit of debt and credit card bills, asking ourselves, ‘why am
I even in debt?’ and ‘how the hell do I get out of here?’
scrutinized the major causes of debt and thus we have shortlisted five of the
major reasons that young Indians fall into the rut of debt.
1. LACK OF A BUDGET
Most of the time, poor budgeting invokes debt. You must have a
monthly budget. Without a proper budget, you will not be able to track your
expenses. And if your expenses exceed your income, you will be pulled down to
2. INCOME ISSUES
If you are currently going through a rough patch in your career or
if you are unemployed and are looking for a job – the period might be low. But
the effect that it has on your finances in the long run, is huge. It can have a
lasting effect, because you’ll be wanting to make ends meet and will thus be
forced into taking up credits or loans.
3. DEATH AND DISABILITY
large number of Indians, are living without an insurance cover – and thus at
the occurrence of an unfortunate event, they stumble into a severe state of
financial crises. It is very important to get a life cover, especially if you
have loved ones depending in you.
4. OTHER MEDICAL EXPENSES
Every single step you take inside a hospital is going to cost you
money. Not having a proper health insurance will only make you slip into debt a
lot easier. And when you don’t have the money to pay for your emergency bills,
it will look easier to swipe and put the money on your card or take out a loan
– but there begins your tread down the debt road.
5. LACK OF SAVINGS
If you want to
avoid unwanted debt, try to be prepared for unexpected expenditures by saving
some money. Being prepared for those rainy days, is a sure way to help you
stay out of debt.
The whole point
of leading a life with savings and lots of financial planning is to be
self-sustained, after all.
Pitfalls of Financial Goals
READ ALSO: Dealing with your debt
Written By: BALAKARTHIGA.M
If your bills
give you anxiety and your debts are getting in the way of other dreams, it’s
high time you sort out your debt and get it fixed. Laying out a strategy and
committing to it, will definitely get you out of debt, as soon as possible.
It is as easy
and as difficult as it sounds. Knowing exactly what you owe comes from strong
budgeting habits. The more you procrastinate this, the more trouble you will be
caught up in. Financial experts even discovered that some people resist doing
this, because they’re afraid of what they’ll find. There’s nothing like seeing you’re
spending staring back at you, that forces a behavioural change.
One of the
smartest way to sort your papers out is to consolidate multiple credit-card and
loan bills into one loan with one monthly payment can help you manage what you
owe. This will not only make managing the debt easier, but will also make
paying it a lot less stressful.
If you can't pay
all your debts each month, financial experts recommend focusing on keeping
current on secured debt--obligations like auto loans and mortgages that are
backed by property. Set aside an amount each month in your budget just to
pay off your credit. You'll get a psychological lift from erasing each card's
We agree that
sometimes, doing it all by yourself can be tough. It might be very easy to get
all stressed, depressed and anxious as you see those big numbers. These
emotions can be blinding as well. Which is why, we recommend approaching an agency
that will act as a consolidator, collecting one monthly payment from the debtor
and disbursing funds to creditors and make it much less hard on you.
Once you’ve made
all the consultations and prioritizations, you need to consider what your
options are and choose the best one out of them. This choice has to be made
consciously after deep thought, because it can make or break your debt plan!
Yes, getting out
of debts isn’t easy. But it’s also not impossible. If you are able to cast
aside your emotions, and think logically with a committed strategy, you can win
the battle against debt.
WRITTEN BY: BALAKARTHIGA.M