There can be many contributing factors that cause personal debt. Some top causes are self-inflicting while others can be avoided.
First, being young and inexperienced at all facets of life can cause debt. One has to build credit while taking out student loans and home mortgage. This is a difficult task to keep ones head above water as far as finances go.
Then, there is marriage that costs once again. Starting a family is expensive with little ones on the way. A growing family is even more expensive as time goes on. They grow up and then there is college for them also with all the expenses. And later, one’s own parents will sometimes need financial rescues at an old age.
And, there are traveling expenses after living expenses. This could be the second big investment as a new vehicle. Usually, one has to go into debt by making monthly payments on it. This causes further debt.
There are insurances of all sorts that are an expense too. To keep the above home and auto there is also health insurance that causes monthly debt. Every month, there are insurance premiums for all of these just to name a few.
Last, there are the hobbyists that have expensive past-times. This can add to personal debt after time. Some buy luxury cars. Some buy luxury vacations. Some buy expensive jewelry and have a collection. These are at an added expense and cause personal debt.
These are some other causes of debt such as a loss of a job. In a bad economy there are restrictions at the banking level as to get a loan for whatever reason. There are legal problems that cost money and can cause debt. Hiring an attorney can be a big expense also.
People can go into debt with a bad economy. There is job loss that can contribute to debt. When one can’t pay their monthly bills they fall backwards in debt. Depending on how long one is unemployed is a debt factor. And, with a bad economy there is resistance for banks to offer loans for whatever reason in a bad economic climate.
These are reasons that can cause personal debt. To be successful at a startup business, one has to go into personal debt with a business loan. It is the risk takers that take this step. Not everyone succeeds in business. And, there are no guarantees for business success.