September 9, 2011
How People Fall Into Debt
In today’s financially demanding society, it is unfortunate that some people find themselves having to pay off large sums of debt. It can be a mentally stressful situation. There are many different circumstances as to why people accrue debt. Some struggle with financial discipline and personal responsibility. While others who are more responsible, can still succumb to debt if they suffer a sudden job loss and can’t meet the financial requirements they are obligated to. Money mismanagement and unexpected occurrences are some of the most common reasons why people fall into debt.
Credit card misuse is often a source of a person’s debt problems. Some people do not take enough consideration in to the interest rates that come as a result using credit cards to make purchases. If they are unable to meet their payment deadlines, then late fees are added which compound the problem. Suddenly, borrowing and purchasing items with credit cards starts to become an increasing burden. The average person usually earns a moderate pay salary, which can be just enough to cover the household expenses and cost of living, leaving little to be saved. However, that still does not deter irresponsible spenders from making impulsive purchases with credit cards, knowing they will struggle to finance their purchase. If you’re not wise with the use of your credit card, then you can expect to encounter debt.
Spending more money than you can afford to for something you don’t really need is also a bad habit which can lead to more debt issues. Rather than responsibly determining purchases on actual savings and income, people presume their income will always be there and leverage against future income to support a materialistic lifestyle. Extravagant and indulgent shopping habits tend to pile up on your debt. Homes, cars, furniture, clothing and jewelry are items that are frequently purchased on...