Main Causes of Financial Problems


8 Causes of financial failure

Struggling financially? A lot of people even if they give each other the impression that they did it all. They work, live in a nice house and drive a nice car, but live from payday to payday. Here are the 8 main causes of poverty in the first world.
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Live beyond your income

There’s no getting away with it. If you spend more money than you earn you have to get your extra money from anywhere and that almost always means borrowed money, also called buying credit. There is a cost to all of this and it is called interest. If you are in the habit of buying things on credit then the interest you pay during your lifetime will add to an asset. Interest is sometimes called dead money because you don’t show up for all the interest you paid.
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Think about how much you can spend on all the interest. It’s almost too painful to think about even if you want to avoid poverty so you have to pull your head out of the sand and face the realities; your financial future depends on it.

Continuation of the Joneses

Some people want to keep up with their peers no matter how much they spend their money. It’s a compulsion that will cost you a lot. Living with a different self-image can damage your finances and prove costly by the time you stop working. Maybe you think your peers are financially good enough to get to this point or even they think they’ve done well for themselves but what you don’t know will surprise you. That they may have their eyeballs in debt. Even if they live as long as they can to fund their lifestyle it doesn’t mean you have to keep up with them.
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Don’t be a happy person and live according to other people’s expectations, live according to what is the right way to act for your own circumstances and be happier.

Consumer Debt

Consumer debt or deaf debt as it is often called it is the purchase of things using borrowed money. This is what is spending tomorrow’s income today. Debtors are not often aware of what is happening to the so-called items they buy on credit; that their newly acquired assets are worth less the minute they buy them. An important factor to follow is this; The money owed to the object is always more than the value of the object. No one has many people caught up in the cycle of debt deprivation and not just those on lower incomes; in fact people are at a middle likelihood of this trap.
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Commerce in Greed

Commercialism during the 20th century brought many advances; it provides jobs and creates many businesses but there is another side to it. The first poverty in the world causes an unsatisfied appetite for things. People are not content with just the things they need but keep wanting more. Everything has to be paid for, it’s the money that can be used to build a financial base for their future.
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Addiction is very expensive; just ask any smokers. One does not have to be a mathematician to calculate how much cigarette smokers pay for their addictions. Estimated to be over $ 100 NZ per week. That’s equivalent to five grand per year and fifty grand per decade. Not surprisingly, many cigarettes were destroyed. It’s the same with alcohol addicts and panties.

Can’t write financially

Being unable to write financially is the main cause of financial scarcity and it is not just those with low incomes who are unable to write financially; people with high incomes may also feel guilty about it. You’ve heard stories of successful people in the sport who earned millions during their heyday but ruined the years after they retired. It’s important to save and invest your money during your best earning years so you can settle in when you don’t have income anymore.


Not taking responsibility for your own finances is not responsibility. They see everything differently on the excuse of why they didn’t join the kiwisaver or didn’t give. Excuses like, “You can’t take it all with you,” “I might die before retirement,” or “I’m just a kid.” People who are not responsible for their finances tend to be irresponsible in other areas of their lives as well. Making commitments whether it’s in a relationship, owning a house or car, or saving for your retirement takes responsibility and that’s what sets men apart from men.

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There is no doubt that bad company is a major reason why so many people live in poverty. It’s been said, “You’re usually one of the five people you spend most of your time with,” so it pays to check who your partner is and ask if their attitude and opinion about finance has influenced your money habits. To grow you need people to help and encourage you. This sometimes means separation from bad company. Some found it difficult but eventually it was all worth it.