If you are neck-deep in debt, you may ask yourself a lot of questions each day: “How did I find myself in this situation? Are my peers struggling as much as I am? What is the average household debt in 2018? Why am I in debt when my friends and co-workers seem to be doing so much better?”
Let’s Look at the Statistics

When we check out data on American debt in 2018, the reality is that most Americans are people in debt. In August 2018, CNBC posted an article titled “Here’s how much debt Americans have at every age.”

Here are some data points from the article:

Average debt per person in America: $38,000 without including mortgages,
25% of all debt is credit card debt,
20% of Americans spend 50-100% of their income each month trying to pay off debts,
The highest amount of personal debt belongs to older Millennial in the 25-34 age range, who owes $42,000 on average.

What People in Debt Have in Common
1. Hard Luck

First of all, your personal habits do have a major impact on how much debt you owe, but they are far from the sole factor. It is worth acknowledging right off the bat that you may simply have fallen on hard times.

This is illustrated through the references to older Millennial in the data above. Older Millennial graduated around the time of the recession. As a result, many got a “slow start out of the gate.”

For this reason, they have higher amounts of debt and are further behind in achieving life goals, the most common of which is financial freedom.

Obviously, if you have experienced similar misfortune, there is nothing you can do about what happened. But you can avoid bad habits which people in debt frequently have in common, and which can make the situation worse.
2. Ignorance of Their Circumstances

A surprising number of people with debt struggle to answer even basic questions like, “What is debt? How much debt do I owe?”

If that describes you, you need to answer these questions if you are ever to get your finances under control.
3. No Emergency Fund

Many people with debt lack an emergency fund—around $1,000 set aside at all times to cover unexpected expenses (clinic bills, auto repair bills, etc.).

Without an emergency fund, the only option is to take out a guaranteed approval loan when things go wrong, often with a high-interest rate.

Remember

Getting an emergency fund started when you’re impoverished can be a challenge, but it can save you a lot of money in the long run.
4. High-interest Rates

If you have been struggling with debts, there’s a good chance that your credit rating has also declined, or was low, to begin with. The result is high-interest rates which can make it even harder to climb out of the hole.
5. Excuses

When debt is the result of poor budgeting decisions, those decisions are often accompanied by seemingly reasonable or even ridiculous excuses. For example:

“I expect to get a promotion. When I do, I can pay off this debt.”
“I need this car to work. It makes sense to buy a nice one.”
“Who doesn’t owe money nowadays?”
“I want to give my children things I didn’t have.”

Getting rid of these excuses is the first step in reframing your attitude towards spending and saving.

6. No Plan and No Support

Something else which can keep consumers in debt is lacking a monthly budget, some basic knowledge about repayment schedule, and a plan for paying off debt. Having no support is also a common problem.

Consider credit counseling to get some support and assistance in coming up with a plan for budgeting and repaying your debts. Do your research before choosing a counselor. Some services are excellent and are genuinely focused on helping out consumers, but others are not.

7. Burnout

Finally, being in debt for a long time is exhausting, as is living in poverty or anywhere near it. This consumes willpower, which can lead to burnout. To cope, consumers often purchase things to make them feel better, going into deeper debt to do so.

Remember
Breaking this cycle can be a huge challenge, but doing so is crucial.
What Can You Do About It?

As you can see, people in debt typically face a combination of factors that conspire to keep them there. Some of these factors are within their control, and others are not.

Your first step is to figure out what choices, mindsets, and behaviors may be contributing to your debt which you can control.

Tip

Use the professional help and support you need, and take a long, hard look at your monthly budget.
Bottom Line

No matter what circumstances are beyond your control, learning how to budget and adjusting toward a thriftier mindset can go a long way towards helping you climb out of debt. To reduce your debt use our 1 Hour Payday Loans. this service is most populated among Americans

Source Link: https://badcreditloansasap.com/financial-thoughts/what-do-people-in-debt-have-in-common/