Top 10 causes of debt

There are so many people out there looking for advice on dealing with debt and how to avoid debt. There ways to avoid debt are as simple as looking at what causes debt.

1. Less income/ same expenses.

When a reduction in income happens, it is easy to keep living the same and allow debt to fill the gap. When changes happen the entire budget must be recalculated to fit the new level of income.

2. Divorce

Over half of today's marriages will end in divorce. It can be very expensive and incur thousands of dollars of debt. If you aren't divorced, you can see what it's like by selling all of you assets for $50 bills. Then go out to the roof of a tall building and compete with your spouse to see who can through the most money off the fastest. It won't take long.

3. Poor management of money

Having a budget is necessary. If you don't have one, how do you know where your money is going? You could be spending hundreds of dollars each month and still charging things that you don't need. All you have to do is write down your expenses and income and subtract to find the difference. Once you make the right decisions on where you spend your money, you will feel in control.

4. Underemployment

You may feel that you are only in a temporary situation and that a better job is just around the corner. Okay, but you still need to get your expenses to match your income. If you increase your income later, then you can add resume some of your previous spending.

5. Gambling

One of the fastest growing luxury spending categories is gambling. You are guaranteed to lose more money than you will make. Gambling is highly addictive and loans are freely available. You can even mortgage your house at a casino while under the influence! Well, this is entertainment at its best.

6. Medical expenses
When you have a lapse in your insurance or a gap between policies you could pay dearly. The increasing costs of health insurance are affecting millions of people. Every doctor's office will take credit cards, and it isn't for your convenience. The doctor wants to get paid immediately. This means more debt for you and less for them.

7. Not saving enough

The best way to avoid debt is to prepare for the unexpected. You should have in savings enough money to pay three to six months of living expenses. IF you have an illness, job layoff or divorce, you will not be immediately trying to find a loan to help you get by. If you pay yourself first, you won't have to pay someone else in interest. No one has ever said, "I wish I hadn't saved."

8. Not talking about money

Your entire family should talk about finances. Be open and honest with your spouse about your financial goals and spending. There is always a way to compromise, you just have to be honest and accountable. You have to know what creditors you each have, because most likely you are responsible. Many people wake up one day to find out that their partner has racked up thousands in untold credit card debt. This often leads to number 2.

9. Banking on tomorrow

It is so easy to spend what you don't have yet. When I get that raise, I'll pay off this card or we'll spend the bonus on this. Job bonuses are never for sure until they are in your hand. Inheritances are set in stone. Don't spend the money until the check clears the bank.

10. Financial ignorance

Most people just don't understand how money and debt works. You need to know how money grows, how to save and invest and how to balance your checkbook. Schools don't teach this vital information, and many of our parents didn't truly understand it either. You must teach yourself and your children. Financial mistakes can cost you dearly. Get the knowledge and take control of your financial future.