Why We Need A Debt Management Solution

More and more of us need a debt management solution, but why? What are the common causes of debt?

The Common Causes of Debt

It can be extremely worrying to find you have a debt problem and you may be concerned that you have to seek out a debt management solution. Just because you are struggling with debt, does not mean you have acted irresponsibly. There are thousands of people struggling with debt and you are definitely not alone.

Some reasons for debt are from over spending and poor money management but there are also reasons for debt that are beyond your control. Some examples of why people fall into debt and need a debt management solution are:

• Relationship breakdown

Divorce can be incredibly costly. Court fees, acrimony and child support can have devastating impact on your finances. But any relationship breakdown will have a financial impact. If, for example you are co-habiting and sharing a mortgage, life on a single salary when you are used to sharing can be tough. In these circumstances sometimes you have no choice but to seek out a debt management solution.

• Reduced income

If your job role changes or you have to go for a position on a lower salary for whatever reason, it can be hard breaking old habits, especially if you are used to a certain standard of living.

• Redundancy/ Unemployment

If you have been made redundant or lost your job it is easy to fall into debt quickly without regular income. Even if you have redundancy insurance, this probably won't cover your lifestyle costs. Taking the first job that comes along as a temporary measure can also have an impact - if you are underemployed and on a lower salary, but still have the same outgoings, that's a sure-fire way of getting into debt.

• Poor money management

If you have a credit card with a high APR then you are probably throwing money away unnecessarily. Shopping around for your financial products and services and often restructuring your assets can help you find a solution to debt management.

• No savings

If you don't have any savings and an unexpected expense comes along - the car needing new tyres, dentistry work, increased rent or needing a new fridge - it can lead to debt. Ideally, you should have contingency plans and a savings fund for unexpected financial blows. If not, you will have to find another solution for debt management.

• Unable to say 'no'

If you are unable to say no to your children, spouse or significant other, when you hit the shops, then you could get into trouble. You should communicate clearly about your finances and not pretend you can afford more than you actually can. Be honest about what you spend as a family - it's too late if you find a stash of new shoes at the bottom of the wardrobe! And if you're really unlucky, your finances could take a further nose dive if the relationship breaks down.

• Cloud cuckoo-land

Living your life thinking that you will win the lottery or inherit millions from a long lost aunt can make you feel blasé about money. Don't kid yourself! Remember you're more likely to be struck by lightening. Get a reality check on your debts.

For debt management solutions visit MRA Business Solutions at www.mradebthelp.co.uk, or call 0800 612 92 23.

For independent financial advice, visit our sister company Mike Robertson Associates at www.mraltd.com. You can email an independent financial adviser for professional help, or call 0870 803 1995.

Ask the Expert