Top Four Causes of Debt in America, and How to Prevent Them

Debt is becoming a major crisis in America. As inflation goes up and wages remain stagnant below the cost of living, it is becoming exceedingly difficult to live in the United States. Once a person falls into debt, it is extremely difficult to climb out of that hole, sometimes taking years or even decades to pay off what is owed.

The causes of debt are numerous, and some can come from out of the blue. Others are intentional expenditures without any oversight or forethought put into them. There are ways to prepare for the unexpected, and ways to prevent falling into debt from what you can control. Here are some of the top reasons people go into debt and how you can prepare for such an eventuality.

Medical Costs

Health care costs in America are astronomical! Many companies with a certain number of employees are required to share the cost of the employees’ health care, yet millions of people still go without health care coverage. Not all employers can afford to offer such benefits, and a person may not be able to afford coverage on their own. Because of this, these millions usually do not see a doctor until a medical issue has become exasperated, and by then, it’s often too late.

If a medical problem requires a rare or expensive drug, or surgery to repair the issue, then the person may build up a large medical bill. So large in fact that they may never be able to pay it off. Having too much outstanding medical debt on your credit report could prevent you from receiving additional credit for other necessities.

To prevent enormous medical debt, make sure to see a doctor regularly, or as soon as you suspect a problem. You may have to put money aside for just such an occasion, but doing so will help not only your health, but also your wallet.

Keep fit and eat healthy. Yes, some medical issues can appear out of nowhere, but by exercising regularly your body will be less likely to develop issues that require medical attention. Consuming the right foods in the proper portions can have the same effect. Take time out of your busy schedule to get active to keep your medical costs down.


When a couple gets a divorce, for whatever the reason, this can cause both parties to go into debt. The bills that are in both names gets divided, but this does not always happen evenly. Depending on how property is split, one spouse could end up with additional financial obligations, and that spouse may fall into debt because of it.

At times, one person becomes responsible for the payments on the other’s property, like the house or car. And sometimes the responsible party does not fulfill their obligation. When this happens, the credit of both spouses is affected.

If you want to make sure this does not happen to you, the simplest thing to do is not get a divorce. You married that person for a reason. That person married you intentionally. You promised you would love one another. Prove it. Yes, there are going to be bad patches; this happens in all relationships. Do not believe in the fairy tale ending. You will have to work at staying together. Be open, and do not be afraid to communicate. That is where the breakdown often is: communication.


A person can suddenly lose their job. In these hard economic times in this country, with retailers shutting down at tremendous rates, and other businesses closing their doors daily, it can happen to anyone. This causes a major strain on a person’s, and a family’s, finances. Without money coming in, there is no means of paying bills and other responsibilities. This can cause you to fall into debt quickly. Especially if you are out of a job for a long period of time.

Being underemployed is another issue that leads to debt. If you do not earn enough income, then the same as above applies. Sometimes, a person can work two, or even three, jobs, and still not make enough to support their family and pay their expenses.

The best thing to prevent debt from underemployment is to live within your means. Yes, it can be tempting to splurge to make you feel better, but this will only lead to financial issues you may struggle to recover from.

You can also go to school to learn a trade. While college is the preferred method of higher education in the United States, it is not the only one; after all, who is going to repair the wiring in the office all the college-educated people are sitting in? There is always a need for skilled employees in the vocational trades, and the income from these jobs can be enough for a family to live off of one income.

Spending Habits

This can be, by far, the most controllable means of preventing debt of them all. As previously mentioned, people who are underemployed, people who struggle paycheck to paycheck, have a tendency to spend what they do not need to be spending. Psychologically, they are trying to relieve themselves of the stress of barely making ends meet. In reality, they are hurting themselves even more.

Poor spending habits can also develop in a person who earns a higher income but puts no restraint on their purchases. We see celebrities and lottery winners do this all of the time. They might be able to spend money for a time, but eventually, they start running low of funds; or they reach the point where they cannot pay back the debt they have amassed and file for bankruptcy.

To prevent this, always be responsible with your spending. Just because you have a credit card does not mean you should max it out, nor shouldT you make a purchase that your income cannot support monthly payments for. Buy what you need first. If there is something you want to splurge on, ensure that you can work it into your budget before making the purchase.