Even people with good jobs get trapped in debt. One study found that about 33 percent of households with an income of at least $75,000 per year — and often more — still lived from one paycheck to the next. Other studies have found that most Americans — 73 percent — don’t even have $1,000 saved up, and the average credit card debt stands at a comparatively staggering $16,000.
So, why does this happen? While every case is different, there are a few consistent reasons, such as:
— Desperation: People run into a tough, unexpected situation, and they get stressed out. They make poor choices, like just deciding to charge everything to a credit card and figure it out later.
— Ignorance: In many cases, people have debt relief options that they simply don’t look into. One expert noted how common this was with student loans. From loan forgiveness to payment reduction plans, it pays to know your options.
— Lack of Planning: People often spend in the moment. Rather than thinking about how planning for the future may be able to give them financial freedom — making them very happy in the long run — they buy things that bring in a small amount of happiness in the moment. The trade-off is lasting debt.
— Not Having Emergency Funds: Emergencies are one of the biggest sources of debt because people feel like they have no options. When the car breaks down, for instance, you have to pay the mechanic or you can’t go to work. That’s why it’s so crucial to have an emergency fund.
These are just four reasons of many, but they do help to shed some light on the debt problems in Wisconsin. Make sure you do your research and know what options you have if you’re struggling with debt. It’s the key to working toward a better financial future.
Source: Time, “23 Reasons Why You’ll Always Be Broke,” Elyssa Kirkham, accessed Jan. 13, 2017