Kris
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People want material items now, not later when they have the money to pay for them. And credit card companies allow people to get things immediately. Unfortunately the temptation to get things now can override people's common sense - they don't fully think through the insane interest rates that will plague them for years to come. From there it is a downward spiral into a life of debt! |
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bennyboyuk1980
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We live in a want it now culture and unfortunately due to the ever ready availability of loans, credit cards and store cards, many people get in a little too deep.
Some people have very genuine reasons for getting into debt such as sudden unemployment or one of lifes many little dilema's.
An example of this and bad decision making is what I have been through. I left Uni with the usual student debt and credit card/overdraught and went into the job market. I quit uni though rather than sticking it through. Walked into my bank who cancelled my bank account there and then as it was a student account and gave me a regular account.
I then had it told to me that I would need to pay back the 500 pund credit card and 1500 pound overdraught immediately. Not knowing base from apex I took out the recomended load and thought nothing more of it. Then a few weeks later I needed to extend the loan as I found a new job but needed drivers liscence and a car to get there so went back to the bank who said no problem. They would get the loan to cover the original amount owed and the extra on top. Me being young again and seeing the end to my problem went through with it.
I got into difficulties with the payments being very high and asked how much I owed - it was about eight thousand as the loans were high interest and there was a large penalty for paying off the first loan early - ie I had to pay all the interest the same as if I paid over the 4 years, plus the interest on the second loan. So I racked 8 thousand in debt within a month of leaving Uni, plus the original 9 thousand student loan.
I had terrible problems with the repayments plus I bought a very bad car and had repair bills all over the place until the engine blew. I then had to get a car on credit as I had no money whatso ever so went to Yes car credit who sorted me out a 4800 pound car at 37.5% interest, total credit deal to pay back was about 9800 pounds.
In short - leaving Uni without a degree, getting a working car and a dose of short sighted stupidity put me 26,000 in debt roughly. That was at 20 and am fairly lucky in a sense that I learnt my lesson quick and will be debt free this year, but it has taken 7 years of buying next to nothing and working like a slave!!
Hope this illustrates your question |
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InspectorBudget
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I believe its this mentality of INSTANT GRATIFICATION, and the inability or unwillingness to live within one's means.
It's been said that many use money they don't have, to buy things they don't need or want, to impress people they don't like.
How true.
And how sad that nowadays the vast majority cannot save up for what they want, but have to have it NOW, and a short while later its broken, consumed, or lost. And they're still paying for it a year later through minimum payments on their credit card.
Sad. |
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alwaysmoose
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It's so easy now to get access to money you don't have. |
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cubcowboysgirl
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POOR and STUPID |
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Scotty
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Partly ignorance, and also banks pushing credit on students |
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Wolf
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People today have "instant gratification" mindsets; if they see something they like, they want it now, and hang the expense. This causes debt problems later on. |
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Itrolla
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The rising cost of education for starters. |
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Libra
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why indeed. . . |
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Nolan D
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Two words....CREDIT CARDS. |
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avery
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I think we all are trying to live above our means... Trying to keep up with the Jones, so to speak........ |
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Lync
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Because of credit cards, they are the worst thing in the world. I went a penny overdrawn and the bank charged me £75 for it. I went into the bank and asked if I could get an overdraft on my account seeing as I didn't have one. And they told me no because I was £75 overdrawn. They then went on to offer me a flippin credit card! Like that's gonna get me out of debt. My sister actually thought she should get one to have a good credit rating so she could apply for a mortgage. Me and my partner haven't got a single credit card and the only debt we have is our mortgage and that's the way it shall stay! Young people think it's money for nothing without realising how much interest you get charged. They are dangerous things. |
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fiona662@btinternet.com
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bills, independence, stupid offers eg... sky for 7.50 a month sounds good until you get a 7.50 bill with all the other bills. it is all down to how people are and if they are easily pulled into things and if they can manage their money or not. or in my case can manage their partners spending habits |
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Joe S
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Instant gratification and the advertiser's telling people if they buy their product, they will be cool....
Also, schools don't involve themselves in personal finance. I was told by a college professor that the reason was there is no way to get grants for doing this. The schools don't make money on teaching it. |
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JIM B
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because they cant see past the end of there nose
spend less than you earn and you cant go wrong
i left school when i was 11 to work full time and it didn't do me any harm now ive got my own land with NO mortgage .
im 27 |
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Chariddie
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because we want more than what we can afford and its so readiliy available? |
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TOM
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because it is so much more a material world these day and through greed the banks have made it far to easy to acquire credit |
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doodlenatty
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It's just modern culture that makes us think we have to have the latest things or the most fashionable clothes. Plenty of companies have moved in on this and are cashing in at our expense! They make loans seem so easy and strightforward but people are able to take out way too many loans or credit cards and thats where the big problem lies. |
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mac77
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Depression. People use money as a drug to feel better about themselves. That's when the troubles begin and the bills pile up. When someone is down in the dumps, she or he believes if they buy something spectacular like a 53" Plasma HDTV, it will make them feel better. Yes, it does, of course, but when the bill arrives they ignore paying it by sitting with a smile on her or his face in front of their monster, crystal clear TV. |
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CouchPotato
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There's some really smart people out there who are highly trained out there who try to sell you stuff (they're called advertisers). Trust me, they're really good at what they do and if you get a chance to do some persuasiveness training, hynotherapy or work on suggestibility, you'll get a real good glimpse and how efective their techniques can be.
Now these people get a fortune to convince you to buy, buy buy - and luckily for them, one of their best tools for selling to you, the TV, has really taken off with a lot of people. Nowadays, they're in you home for an average of 3 hrs a days telling you that you must have the best car, the nicest aftershave...if you are to earn other people's respect, attract good looking strangers, etc etc. |
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tnbadbunny
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Because its call instant gratification. People have store credit cards thrown at them. Some do not want to save for something or law away. It is prov-en that a person will spend more on a credit card than with cash, that's why stores try to entice you with their store credit cards. |
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purplepartygirrl
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Because of capitalism. It's not the people's fault. They are bombarded 24/7 to advertising which is inclined to get them to go the way that they weren't necessarily leaning... |
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RockManRock
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i suppose it's on 2 levels-
credit companies are so aggressive these days. ie 0% interest free loans . so why not?
Pair this with the capitalist desire to buy more stuff for little reason (HD TV , Xbox 360 , massive cars)
But the biggest cause of consumer debt is the growing house prices .
is this sustainable ? |
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SCOTT B
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BECAUSE LOAN COMPANIES ARE RIFE AND THE FACT THAT INFLATION IS LOW AND SO IS INTEREST RATES, THEREFORE BANKS ARE DESERATE TO GIVE YOU MONEY, AS IN ALOT OF CASES ITS SECURED ON YOUR HOME, THEY DONT CARE IF THEY HAVE TO TAKE YOUR HOME OFF YOU IN THE FUTURE!! THEY WILL STILL GET THEIR MONEY BACK WITH PROFFIT FOR THEIR GREEDY SHARE HOLDERS |
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b97st
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Because we spend too much. |
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NATALIE W
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Because everybody is trying to keep up with everybody else(keeping up with the jones-because the world and technology moves so quick these days,people want the latest gadgets straight away,rather than wait ,so there is very few people saving for things,they will pay with a credit car or get a loan out! |
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peter w
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Peer pressure, credit cards and desire for success and admiration due to material goods |
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sneha k
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if people started spending only on those things that are necessary then i guess there will never be any more problem.again those things should be within our limits.we should also remember that money is surely not the key to every problem.AND MOST IMPORTANTLY if you start spending too much way beyond your means then there is a SERIOUS PROBLEM WITH YOU. |
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jurema
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a lot of people never learn to separate wants from needs, or how to make and stick to a budget. |
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glossykisses16
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because people are having more childern. and for people with cars gas has gone up so you spend more money on that. |
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alliea99
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Part of our 'Have it now' culture unfortunately. Debt used to be a taboo subject and wasn't acceptable.
Now, being in debt is seen as normal and acceptable. Also, its a lot easier to get into debt than ever as credit cards and loans have become widely available.
I honestly think that personal finance should be taught in schools.
I'm debt free (finally!) |
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