No one wants to live their life knowing they owe someone or a creditor money and that this person or creditor can come at any time to repossess their things in order to recover their money. This is certainly not what people have in mind when they allow their debts to accrue. Such eventualities may lead to an emotional roller-coaster for both the person and their families.
We explore 4 negative effects of debt in your life.
Debt will negatively affect your personal life
This is especially true for a person with a family. We all know that one very sure way of reducing your debt is picking up an extra shift at work or getting a second or even third job. What this means is that you will be spending your entire day and even night working in order to get extra cash to pay of your debts thereby keeping you away from your family or finding time for your own relaxation. Such scenarios negatively affect your life and even well being.
Debt will eat into your nest egg
When most of your income is going into the repayment of debts, you won’t be left with enough to put aside for emergencies, savings or retirement. In some cases, you may be forced to dip into your savings so as to settle accrued debts. This is not the kind of life you want to live, whereby you and your family are not cushioned against emergencies or any other eventualities.
Debt attracts more debt
Often, when you are neck deep in debt, and you don’t have a feasible way out, chances are that you will likely dig yourself further into debt because you simply have no option but to continue surviving. It is therefore important to do everything within your power for the sake of yourself and your family not to fall into debt or not to let debts accrue. The longer you wait to start paying off your debts, the harder it will become to repay them.
Debt exposes your wages to garnishing
A number of states in America have permitted garnishing of a person’s wages to recover unpaid debts. Current statistics indicate that credit card debts and student loans are currently part of the top three reasons for an employee’s docked wages. This is after child support and tax liens which top the list respectively. Exposing yourself to this may have serious implications on your budgeting.
In life, it’s always important to have a financial plan for your future, for your sake as well as for your family’s sake. With a plan, you will ensure that you make better spending decisions that will ensure you never fall into the debt trap.
Infographic by: www.visual.com