Why Do People Go Into Debt?

Why Do People Go Into Debt?
If you know why people go into debt, then you will know
<i>how</i> and <i>why</i> not to let yourself go into debt.
Go debt free is the way to go!

If you think you <i>can</i> get out of debt, most probably
you <i>will</I>. Your attitude is often the determinant
factor. This, however, has little to do with positive
thinking; rather, it has everything to do with the
determination of the human spirit, which God has bestowed
on each one of us. Harness that human spirit; if you find
the will is strong but flesh is weak, call upon the
Almighty God to give you strength.

If you only buy what you <i>need</i> - not what you
<i>want</i> - you will never get into debt.

If you "buy on credit" you are in fact limiting your
choices in future. Just think about that.

Everyone can be debt free by committing to becoming debt
free, no matter how long it may take. The problem with most
people is that they don't want it badly enough, and that
they always come up with more excuses to spend.

Why do people go into debt?

Firstly, people go into debt through <i>deficit
spending</i>. A deficit occurs when spending exceeds income
at any given time. An accumulated deficit become a debt,
and a debt is a financial obligation or liability to pay.
To avoid deficit spending, spend <i>below</i> your means.

Secondly, many people get into debt due to unforeseeable
circumstances, such as exorbitant medical bills as a result
of medical emergency, or loss of a job. However, these are
rare occurrences. So, keep yourself healthy, physically,
emotionally, and mentally. Eat right and exercise regularly
to stay healthy. A clean bill of health keeps the doctor
away. In addition, good time management may also take away
much of the stress in everyday life to maintain your
emotional and mental health. Furthermore, a healthy
marriage not only reduces daily stress but also avoids
financial disaster resulting from a divorce settlement.

Thirdly, many people get into debt by personal choice. Yes,
they simply choose to spend without thinking by buying the
things they don't need with the money they don't have. Or
they make a wrong financial decision, such as a bad
investment. Learn to live below your means. Be cautious of
any financial commitment or investment. Look before you
leap.

Fourthly, many people get into debt through self-denial.
Many argue that debt is good: after all, a great portion of
our GDP comes from consumers' spending. It is in the
American culture to buy "on credit" and debt is no more
than "past due payments." Now that the price of gasoline is
soaring and inflation is escalating, many Americans begin
to feel the pinch, and they <i>should</I> be, because debt
is debt.

Finally, many people get into debt simply because of their
ignorance. Yes, many people don't' know anything about the
APR on their credit cards: they have no clue as to how much
they are paying for their interests on their credit card;
nor do they know the implications of "minimum payments." It
is this ignorance among the general public that has
propelled the rate of defaults and foreclosures in this
country. Educate yourself on money matters.

In life, you must learn to give up on some of the extras.
This is critical to getting out of the mountain of debt you
may have. Break free from financial bondage, which may
shackle you for the rest of your life, limiting your
choices further down the road.

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Stephen Lau is a researcher and writer. He has published
several books, including "No Miracle Cures" on natural
healing, "How to Teach Children to Read" on activities and
games to teach children reading skills; and "Blueprint for
Affiliate Business Success."
The author has also created many websites on health, golf,
eating disorders, and money management.
http://www.longevityforyou.com
http://www.smartcreditsmartmoney.com