There are multiple reasons why people get into debt. So we'll look at some of these reasons.

Reduced Income

One of the common reasons that some people get into debt is because of a reduced income. They could be earning a certain amount every month or every year but all of a sudden, maybe they lost their job or they were unable to work and so they experience a reduced income. And so tide them over, they needed to take a loan for short term. So sometimes a reduced income can be a reason why some people get into debt.

Gambling

Another common reason that some people get into debt is through gambling. What happens is they lose the money at the casino or when they're gambling and they think to themselves, "Oh, okay, I just need to get a short-term loan just to, you know, I make back my winnings."

Now, this is very very common. People who get into gambling debts tend to go into a spiral. They think that "Oh, I can win this back, I can win this back, I can win this back." This is deeply psychological. And so there's really no logic that comes into it but our emotion. So be very wary, that if you start to borrow money just to pay off your gambling habit.

Medical Bills

The third reason some people get into debt, and this is quite common, are medical bills. Have you seen a lot of people who suddenly had a medical emergency and their bill went into the five or six digits sometimes? So having such a large burden all of a sudden can be very taxing and not all of us have the kind of liquid money just lying around for us to pay.

Medical bills can be very very heavy and we just need to take that loan sometimes. Now, there is a way to prevent this from happening. We'll cover that in another post but medical bills can be a very common reason why some people get into debt. They just can't afford it at that time and so they borrow money to pay it back.

Bad Money Management

Reason number four? Bad money management. Quite often we meet people who are, for lack of a better term, who just don't know any better. They think that money grows on trees, easy come, easy go and so on. So sometimes bad money management can lead to people getting debt. Bad spending habits: spending too much on luxuries, not thinking purchases through, living beyond your means.

So bad money management is a much deeper issue than most of us realize. We're pretty much financially illiterate when it comes to managing your money. Bad money management, we have realized is actually one of the leading causes of people getting into debt. They just don't understand how money works.

But the best way to avoid having bad money management is simply to educate yourself. Go learn, pick up a book and read. It's very easy. Few minutes a day, read a book, pick up some good habits. That's one of the reasons why a lot of people get into debt: bad money management.

So these are some of the common reasons why some people get into debt. Reason #1 is reduced income. Maybe they lost a job or just unable to work. Reason #2 is because of gambling. Have you met someone who has a gambling habit? Just keep borrowing money in the hopes that they might make it back. Reason #3? medical bills. Unforeseen emergencies that happen and you know, they don't have that kind of money just to pay all that debt so they take a loan. And of course, the most common one is just bad money management. They've got bad habits which some people aren't even aware of.

Now, think about it. How else do you think people get into debt? And I'm not talking about the good kind of debt which we've covered in some earlier post, but about the bad debt. Comment below, let us know what are some of the examples you can think of and reasons why some people get into debt.