5 Things That Can Cause Personal Finance Problems

It’s important that everyone knows how to stay in control of their personal finances. However, there are certain things that can cause us a lot of trouble. To find out more, have a read of my piece on the main things that cause financial problems: 
Poor Investments
Anyone with a financial brain will tell you that investing is a positive thing to do. It’s a good idea to invest your money, instead of spending it on pointless things. With a good investment, you can end up earning more and more money. However, not every investment is good. Sometimes, we make poor investments and end up feeling the consequences. There are a few investments that make sense to make. For example, owning a few shares is a good idea. You don’t have to spend much money, and you may earn cash over time. Or, invest in gold, something that will always have value. Bad investments are ones that have a high element of risk involved. And, ones that require you to spend lots of money. A lot of people get put in tough financial situations because they invest in real estate. And, while property investments can be good, they’re not always guaranteed to work. Especially when you don’t know a lot about the market, and have very limited funds.
Personal Finance Problems
The problem with a bad investment is that it can cause you to lose a lot of money. You can go from being reasonably wealthy to having very little, and struggling to get by. And, when you’re struggling for money, it can be hard to recover from a poor investment. Personally, I think everyone should stick to simple and risk-free investments. Put your money in something that will slowly increase over time. There are plenty of stocks that are like this; they’re perfect for the average person. Don’t get persuaded to start buying and selling things like crazy to try and earn big money; you’re probably going to fail. If I had to give you one piece of advice, it would be to hire a financial advisor of sorts. Go to your bank and speak to someone about investing. They’ll help you make the right choices, and stop you from having personal finance problems.
Tax Issues
Tax is one of those things that we all hate, but almost everyone has to pay. When you start earning money, you automatically pay tax. If you’re working for a company, your wage will be taxed before it’s paid to you. So, already, you’re earning less than you would without tax. If you’re self-employed, then you have to file an income tax return. When you buy a car, you need to pay road tax. Buying a house means you might have to pay tax on it too. As you can see, there are so many things in our life that are taxed and cause us to pay extra money. The problem with this is that it can cause a huge strain on our personal finances. If you’re running low on money, an upcoming tax payment is the last thing that you need. 
And, to make matters worse, late tax repayments are penalized even more. If you miss a payment, you get charged extra, and this charge increases the longer you leave it. So, if you’re struggling for money, and can’t pay tax, you could end up in even deeper trouble. The main issue is with income tax for self-employed people. If you fail to file your tax return on time, then there will be serious issues. Plus, some people forget to save up money to pay for everything. When the payment date rolls around, you might not have enough in your bank to cover the costs. So, what do you do? You end up applying for a loan to help you pay on time. Or, you don’t pay and incur further charges. If you have to file an income tax return, then you should look for a tax service to help you get things organized. This will ensure you pay on time, and don’t get further issues. The bottom line is, tax issues can cause serious personal finance problems for everyone. You’ve got to stay on top of your payments, or things will go wrong.
Unemployment is arguably the biggest thing that can cause financial problems. Naturally, if you don’t have a job, then you’ve got no source of income. You can get income support from the government, but that won’t be a suitable way of living your life. Especially if you have a family, with bills to pay and mouths to feed. And, this is possibly even worse if you had a job but were made redundant. When you have a job, you’re used to getting your regular income. It shapes the way you live your life and dictates how much money you spend all the time. Take away that regular income, and you could be in trouble. You might find it hard to afford all the bills or keep living the way you were living. You’ll be put under a great deal of financial stress until you get yourself back into full-time employment. 
Obviously, the solution to unemployment is finding a job. But, it’s not as easy as it sounds. Most unemployed people want a job; they just can’t find one. If you were working but got made redundant, then I have some tips to help you while you look for work. My first piece of advice is to consider looking for part-time or freelance work. Just a little something to help you get regular income while you look for a proper job. My other piece of advice is to set up a savings account the moment you get a job. Deposit funds into this account, and you’ll have some financial security should you ever become unemployed. Also, I fully recommend you apply for income support from the government. Yes, it might not be much, but it will help you get by until you find a new job. If the support is there, you may as well take it. At the very least you should enquire about it. If you aren’t eligible, then there’s nothing you can do. As you can see, there are ways to help you deal with sudden unemployment. Follow those tips and your finances will be a lot more secure. There’s no doubting that being out of work is a top cause of financial problems. The sooner you find a new job, the better.
Lots Of Debt
When you’re talking about what causes financial stress, then debt is right up there. It’s shocking how many people are living their lives with lots of financial debt. The fact is, life is extremely expensive. So much so that we’re required to take out huge loans just to buy a house for our family to live in. That’s right; a mortgage loan is the biggest cause of debt in the country today. The second biggest is credit card debt. When you owe lots of money to someone, it becomes a huge burden on your life. You can’t go out and buy what you need to buy because you have this debt lingering in the back of your mind. And, it’s easy to start owing more money to different companies and institutions too. Think about college tuition fees; these have to be repaid too! 
The best advice I can give you is to make debt repayments your top financial priority. You want to pay everything back as soon as you can. Then, you lift that financial burden and can start living a more comfortable life. I also suggest you avoid getting into this tricky situation to begin with. Obviously, if you get a mortgage, then debt is unavoidable. However, you can avoid credit card debt and any other forms, by being shrewd with your money. For example, don’t overspend, and you won’t go over your credit limit.
Various Addictions
Yes, addiction can be the cause of many financial problems. If you’re addicted to something, you end up spending lots of money on it. We could be talking about drugs, alcohol, cigarettes; you name it. Everything costs money, and repeat purchases will soon add up. It’s no secret that addiction is a leading cause of bankruptcy
Furthermore, there is one addiction that I think is more costly than the rest. I’m talking, of course, about a gambling addiction. If you gamble, then you’re always at risk of losing lots of money. Even if you place one bet, you could lose a lot. Now, imagine taking that risk every day. You will lose a fortune. Gambling addicts end up with no money, no home, no car, and no family. If you feel like you have any of the addictions I’ve mentioned, then I beg you to seek help. Cure your addiction, and then find someone to help with your finances. 
I implore you to be wary of all the things mentioned in this piece. Any of these five issues can cause you financial distress. If you fall victim to one, follow my advice to get yourself back on track.

Denny Jones

Hello, I'm Denny Jones, the voice and mind behind this personal finance blog. With a passion for helping others achieve financial independence, I started this blog to share my insights, experiences, and strategies in managing money. Whether you're just starting out on your financial journey or looking for advanced tips to optimize your wealth, my goal is to provide practical and actionable advice that anyone can follow.

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