| The top 10 causes of debt | |
|
| 6. Medical
expenses. Gaps in coverage, lapsed policies and increasingly costly alternatives
make this a popular category. Just about every doctor I know now takes credit
cards. If you think it's for convenience, think again. The medical industry wants
to get paid at the time service is rendered. They know that if they don't, the
chances of their getting paid drops. This means more debt for you, less for them.
To be fair, they are not in the lending business, but this only masks a bigger
problem
7. Saving too little or not at all.
The simplest way to avoid unwanted debt is to prepare
for unexpected expenditures by saving three to six months of living expenses.
With a savings cushion in place, a job layoff, illness or divorce will not cause
immediate financial strain and increase debt. You always hear, "Pay yourself
first." Do it and it will grow and be there when you need it. No one has
ever regretted having a savings cushion. 8.
No money communication skills. It is important to communicate with your spouse
or significant other and your children about finances. Keep the lines of communication
open and discuss financial goals and spending styles. If you are married to a
spender and you are a saver, you will want to map out a strategy for you both
to get what you want. Know what credit accounts you each have and promise each
other to be honest about what each other spends. Many people find out that their
spouses have racked up thousands of dollars in credit card debt and they had no
idea that the accounts even existed. This often leads to number 2 above. 9.
Banking on a windfall. Spending tomorrow's money today is very tempting.
Especially if you believe that tomorrow will come no matter what. A planned job
bonus may not be a sure thing. The inheritance that you believe will come your
way may not. The lesson is don't spend the money until the check clears. 10.
Financial illiteracy. Many people don't understand how money works
and grows, how to save and invest for a rainy day, or even why they should balance
their checkbook. The schools don't teach it, your parents may not have sat you
down and explained it. It doesn't matter. You are responsible for your life and
your money anyway. Financial mistakes are increasingly expensive and complicated
to resolve. Get educated and get in control. | 
