5 Causes Of Debt And How You Can Avoid Them
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5 Causes Of Debt And How You Can Avoid Them

Age plays a significant role in how we deal with our personal finances. As we get older and progress to different stages of life, our financial requirements and statuses will change accordingly. Incurring debt is inevitable.

Instead of incurring debt unknowingly, why not learn the five common causes of debt and how you can avoid them?

Medical Expenses

A sad fact of life is that our health deteriorates as we age. Medical expenses are bound to comprise a huge chunk of your finances should you fall ill or develop any medical condition. God forbid you contract a life-threatening illness or one which would require you to be on long-term medication as that will drain away a massive amount of your savings.

With that said, it would be a smart move to get insured when you are younger and have the financial ability to pay for it. Do not wait till you have ailments before getting adequate insurance coverage!

Emergency (Loss of Income)

In cases of emergency such as when one gets injured in an accident, loss of income comes next due to inability to work for the period needed for recuperation or even worse, for the rest of the victim’s life.

What can you do to prevent such a predicament? Consider investing in Personal Accident policies so that you would get an insurance payout if something bad befalls you. We hope not, of course! We sure believe that it is always a better option to have some form of insurance coverage for a peace of mind.

Gambling

While the aforementioned two causes of debt may be incurred due to unexpected circumstances, gambling is one area where you should definitely steer clear off!

It is easy to go down the slippery slope once you start feeding your gambling addiction and rack up huge amounts of debt unintentionally and unnecessarily. Seek help immediately if you have a gambling problem by contacting the National Council on Problem Gambling. Gambling is one horrible habit you would want to kick!

Divorce

All wedded couples wish for blissful marriage, death till you part. But what happens when there are irreconcilable differences causing the split? If your marriage is headed towards Splitsville, divorce is the next unavoidable step.

It comes as no surprise to learn that costs and legal fees needed to pay to lawyers of either one or both parties for the whole lengthy divorce proceedings are shockingly exorbitant! After all, that is how well-heeled lawyers earn their keep right?

Well, other than stating the obvious which is to recommend all of you married couples out there to keep your marriage intact and romance alive, there is not much else one can do to prevent a costly divorce.

If couples wish to salvage your marriage, seek help early and consider going for marriage counselling. Subsidised options are available for Singaporeans, do find out more by directly contacting the various Family Service Centres islandwide.

Compounding Interest

With Singapore’s projected inflation rate set to be at 5.4% or probably even increased to a greater amount, average Singaporeans like you and me will most likely be hurt by inflation in one way or another.

The pathetic interest rates of our savings account in the banks will never be tagged to the inflation rate. So scrape that thought about ever earning money from solely putting all your money in the bank! However, interests accrued from defaulting on credit card bills and bank loans will give you a scare if you have ever experienced being late in your repayments.

Thinking of having the choice to pay in installments without resorting to the use of credit cards with nasty consequences should you fail to repay ahead of time? Sign up with Rely now to get 0% Installment Payment Plans (IPP) without having to pay hefty interest rates!

Rely is a platform which charges users ZERO interest for using its installment plans with absolutely no hidden fees riddled on unsuspecting users! You will only have to pay a 10% processing fee, which will be calculated into the monthly installments to be paid. As such, the plan customised by Rely would assist you to better manage your finances without the need to even touch any credit card!

Worried about missing a monthly repayment? Fret not! Monthly repayments are easy you can choose to either pay via bank transfer or set automatic Giro deductions.

To be eligible to use Rely’s services, you will need to be 21 years old and above, have a monthly income with statements provided to Rely for an evaluation of your financial health and credibility based on several metrics before being approved.

Find out more about Rely’s installament plans by reading this related article!

Rely is Singapore’s first and only online platform offering interest-free installment plans for online purchases as an alternative to credit cards.