As my regular readers know my great love for numbered lists (remember the Top 10 Bad Financial Lists), so here is one that I have most likely covered before, however for reasons you are in debt you can never be too thorough. If you are asking, “Why am I in debt?”, this is the list for you.
Top 5 Reasons You Are in Debt
The list itself is pretty straight forward please note the important explanations with each point as well:
- You spend more than you take in, seems pretty obvious, this is how you got into debt and what is keeping you in debt, until you take in more than you spend, you can’t start thinking about getting out of debt either, so you will need to really slow your spending down.
- You make less than you spend yes, seems the same isn’t it? Well it is, it’s that simple, but remember there are two ways to get out of debt, OK, there really is only 1, earn more than you spend.
- Your income is less than your spending, with higher spending comes higher debt.
- Your earnings are not keeping up with your spending and is in fact lower than it, yes, if your spending is increasing faster than your income, you will be in debt.
- Earnings – Spending = Negative Number, that equation seems more complex than it actually is, as long as your earnings are higher than your spending you have the potential to get out of debt (or to stay out of debt).
My apologies if this list was too complex to figure out, I am attempting to keep to my point and not muddle the message with silly commentary on my part.
Did I miss any other points? Just for clarity, what I am saying is you need to earn more money than you spend to get out of debt (and stay out of debt), questions?