The Real Reason Payments Don't Get Made.

Sometimes it’s not so much about ‘the Money’, as the lack of it. Which leads to stresses, sometimes desperate decisions, and unfortunately past-due notices (and maybe even a collection agency).  Here are the five major reasons people find themselves in debt, and what they can do to resolve it.

They Have No Experience or training with Money

    Money management is not something people are born with. Think of life-skills like an app getting loaded onto your cellphone: if you’ve never had the concept of looking after your own personal finances introduced to you, how will you have any concept of taking responsibility for it? The ‘downloading’ of any skill comes via observing or being directly taught by parents…so if the parents themselves have no experience in managing a budget, then it’s an intergenerational challenge. 

    And, just like any other challenge, the biggest step is in admitting that there is a problem. If someone finds themselves in financial arrears, credit counseling is available through a variety of sources.  Reversing lifelong financial patterns is difficult…but it’s NOT terminal. And it could potentially a lifelong game-changer, for the good.

Life Comes with Surprises, and Not Always Good Ones

    Nobody (hopefully) plans on a medical emergency or accident…but they are bound to occur at some point.  Depending on your career, household income could be severely reduced, or diminish to nothing. As well, not everyone is lucky enough to have benefits, so the cost of prescriptions and treatment is a further body blow to the bank account. (And shortly after that, also to your credit rating, if you have any kind of payments due.)  While no-one likes to think about these kinds of outcomes, disability and life insurance are a prudent step to take, for you and your loved ones. And, yes, making out a will as well.

Perhaps a Career Surprise…Also Not Good

    Much like we just said, there are the ‘shoulds’ that we need to observe,(if we are aware enough, and have the financial ability). One of those Shoulds is the idea of having three to six months of savings always on hand, in case of an interruption in cash-flow. Realistically, too many people tap into those savings to cover unexpected expenses, or to indulge in a lifestyle that may be more than is financially doable. 

   If the cause of that interruption is your job disappearing, these are not easy times to find a new one with a comparable income. When that kind of a shock occurs in a household where you’ve been playing Russian Roulette living pay cheque-to-pay cheque and praying nothing goes wrong, then one of the first warning signs is the overdue bills, and the credit collectors that follow them.

In Debt Before You’ve Even Started

    Imagine having the bills we just mentioned coming in, before you have a pay cheque with which to pay them. Students gamble on themselves, betting that the education they’re borrowing to cover will result in a good-paying job that lets them cover that cost. But the average post-secondary tuition takes between nine and fifteen years to pay off. Once again, prudent planning is the only answer. Before attending, take advantage of a student budget calculator to see exactly what you will require, and save putting yourself too far into debt as you embark on your career. If making regular debt payments after graduation is unworkable, then make a minimum-payment plan, either negotiated with the lender of through a credit counselor acting on your behalf.

Personal Surprises

    Another reason a financial education pays off…roughly four in ten marriages end in divorce, and arguing over money is one of the primary causes. The result? One household barely staying afloat financially turns into two households stretched even tighter. As cliché as it sounds, marriage is a partnership, just like a business. And just a commercial partnership has budgets and specific financial goals, you and your spouse need to be on the same page of your own ledger.  For any business, to succeed you need to focus on your Business. If there are Accounts overdue, contact Go Beyond Collection Agency. Because that’s OUR business.