Do you ever worry about debt? The answer is probably yes. Debt is something that can impact anyone and everyone, regardless of your financial situation. The richest person in the world could end up in debt if they made a couple poor decisions. But it’s fair to say that some people are more at risk of debt than others. It is worth looking at this groups, particularly if you are in one of them yourself. That way, you can find out the best options for handling the risks and hopefully avoid becoming another statistic. So, let’s explore some of the social groups that are most at risk of going into debt.
Yes, it’s true, students are at risk of experiencing debt. It’s not hard to understand why. After all, they borrow thousands a year in loans. In the UK two-thirds of students never pay back the money that they borrow. That means it’s with them for the rest of their life. The good news? Students only have to pay a small amount each month, and they’ll only need to do this once they reach a certain income. Typically, this will be the average working wage. You can find out exactly what this is on statista.com.
It’s also worth pointing out that in some careers you can actually write off your student debt. Teachers are eligible to do this in certain cases. If you are a teacher, you can kill you debt clean off with help from the government. That’s a perk that certainly trump's those extended holidays. As such it is worth looking into the careers that allow you to do this and what criteria you’ll need to match to be considered.
Of course, students have bigger problems than paying back their college loans. For instance, it takes on average six months for a student to find a job after they finish higher education. And, even if they find a job, they probably won’t be on the highest pay. As such, they won’t be able to afford a lot of what they want and end up borrowing. This is by far the most dangerous cause of debt because borrowing money can grow out of control at such a rapid rate. Students are also often in two of the other groups of people that we’re going to talk about on this list.
Young Home Buyers
Yep, young homebuyers are always at risk of going into debt, and it’s worth looking at why this is. When you reach your twenties, you’ll see that a lot of marketing is directed at pushing you to buy property. There are no prizes for guessing why this is. If people don’t buy homes, the housing market collapses so young homebuyers are essentially a lifeforce for an entire industry. The problem is that most people don’t really have the money to buy a property in their twenties. As well as this, they typically buy a home that they can’t really afford.
Let’s say you want to buy a house. You can do this typically, with just five percent of the asking value as a deposit. Put it down, and you can spend years or decades paying off the mortgage. Instead of buying a cheap house, you’ll be thinking about the future as well. So, you might buy one worth 250K. Since you won’t have much history on the market, you won’t be able to access the better mortgage rates, and that means repayments can be a real killer. This leads to you falling behind on payments, losing the property and ending up back at square one. If you have already bought a home, you should look into remortgaging, particularly if you are struggling with the cost. This can also help you find better rates on the market.
If you haven’t yet bought a home, you might want to hold off. Wait until you have twenty percent of the asking price to put down as a deposit and you’ll be in a far more secure position financially.
People With Disabilities
According to recent reports, people with disabilities are more likely to be in debt compared to almost any other group. This is often due to the fact that people with disabilities are unable to work, severely limiting their income. They may even be completely dependent on benefits which are often not nearly enough without relying on loans.
People with disabilities often have more costs to contend with as well. For instance, they might have to handle increased medical bills or even renovations to their home. This isn’t always covered by the government or local council. So, how can you avoid debt if you’re in this social group?
Well first, think about whether there are jobs that you can complete. You might be better off working for yourself rather than seeking work under an employer. People with disabilities often face a stigma when applying for a position at some of the larger companies.
It’s also worth pointing out that you can preemptively protect yourself from the costs of disability. Not everyone is born with a disability. If you are in a career where you know a disability will impact your income, you should protect yourself, financially. Sites like insureSTAT.com show you how to do this. Basically, you can make sure that if you do suffer from a disability later in life, you can still gain access to the same income.
The final group of people who are at risk of going into debt are those on a low income. Single parents also fit into this group because they typically won’t have a second income in the household to fall back on. Dealing with living on a low income is about budgeting wisely. You need to cut costs where you can to make sure that you can keep your spending under control.
You should also think about looking for a secondary income that will boost your bank balance. You can learn more about this on listenmoneyMATTERS.com. There are various options to consider here but buying penny stocks is a good place to start. Penny stocks are cheap enough for anyone to invest in and could also give you the chance to one day be rich.
We hope this helps you handle the risks of debt, particularly if you are a member of one of these social groups.