Debt Trap
How easy it is to fall into debt - and how to stay out of it
BILLS
What is a Debt Trap?
A debt trap happens when a person or household takes on too much debt, spends more than they earn and ends up paying high interest, which makes it hard to save and become financially free.
A Consequences of a Debt Trap Higher interest
Lower savings
Stress and and growing debt and less financial money worries freedom
Borrowing again to pay off existing debt
Difficulty in achieving future goals
How to Avoid a Debt Trap
Live within your means Spend less than you earn
Save regularly Use credit wisely
Build an Borrow only for necessities emergency fund
Avoid impulse buying
Buy what you really need
Keep debt low Maintain a healthy debt-to-income ratio
The Goal: Make smart money choices today so you can enjoy financial freedom tomorrow.