The main causes of financial problems

8 Reasons for financial failure

Fighting financially? A lot of people, although they give everyone the impression that they did everything. They work, live in a good house and drive a great car, but live from paycheck to paycheck. Here are 8 major causes of poverty in the first countries of the world.

Live beyond your means

There is no escape from this. If you spend more money than you earn, then you may be getting extra money from somewhere, and that almost always means borrowed money, which is also called buying on credit. It’s all worth it, and it’s called interest. If you have a habit of buying things on credit, then the interest you pay over a lifetime will increase. Interest is sometimes called dead money because you have nothing to show for all the interest you pay.

Think about what you could spend with all that interest. It’s even too painful to think about, but if you want to avoid poverty, you need to pull your head out of the sand and face the facts; your financial future depends on it.

Not far behind Jones

Some people try to keep up with their peers, for which they spend their money. This coercion will cost you a lot. Doing a self-image will ruin your finances and by the time you stop working, it will be expensive. You may think your peers are making great money to afford such things, or you may even think they have done well for themselves, but what you don’t know may surprise you. That they may find themselves in debt. Even if they live within their means to fund their lifestyle, that doesn’t mean you have to keep up with them.

Don’t rejoice in people and live up to other people’s expectations, live according to how to act properly in your circumstances and you will become much happier.

Consumer debt

Consumer debt, or dumb debt, as it is often called, is the purchase of things for borrowed money. It’s a waste of tomorrow’s income today. Debtors usually do not pay attention to what happens to the so-called things they have purchased on credit; that their new purchase is worth less than a minute when they bought it. The most important factor to follow is; The money borrowed for this subject is always more than what is worth. No one draws so many people into the debt and poverty cycle, and it’s not just low-income people; in fact middle-income people are prone to this trap.

Commercial greed

Commercialism during the twentieth century brought much prosperity; it has provided jobs and created countless businesses, but it has another side. The world’s first poverty, which is caused by an insatiable appetite for things. People are not just satisfied with what they need, but want more. All it takes is to pay, it’s money that could be used to build a financial base for their future.


Addiction is very expensive; just ask smokers. You don’t need to be a mathematician to calculate how many cigarettes you smoke for addiction. It is valued at more than $ 100 New Zealand per week. That’s equal to five thousand a year and fifty thousand a decade. No wonder many smokers break down. The same is true for those who are addicted to alcohol and packs.

Financial illiteracy

Financial illiteracy is a major cause of financial poverty, and not only low-income people are financially illiterate; high-income people may also be to blame for this. You hear stories of successful athletic people who earned millions during their heyday but failed a few years after retiring. It’s important to save and invest in the best years of earnings to set you up for when you don’t already earn that much.


Not taking responsibility for your own finances is irresponsible. They will come up with all sorts of excuses as to why they didn’t join the kiwisaver or contribute. Excuses such as, “You can’t take it all with you,” “I can die before retirement,” or “I’m just young”. People who treat their finances irresponsibly tend to be irresponsible in other areas of their lives. Making commitments, whether they are related, owning a home or a car or saving for retirement, takes responsibility, and that is what separates men from boys.

Bad company

Undoubtedly, bad company is the main reason why so many people live in poverty. It has been said, “You’re an average of five people you spend most of your time with,” so you should find out who you’re hanging out with and ask if their attitudes and opinions about finances affect your money habits. To grow, you need people who will help and encourage you. This sometimes means separation from bad company. It is difficult for some, but in the long run it is all worth it.