Why do people go in debt? where do they spend all there money?

Question

is just that im asking because im very young and want to know that how and what takes peoples money i know for sure that i dont go spending money around so why do alot of people end up in debt it s happening alot nowadays

Answer 1

it usually starts the day you say "I Do" and goes downhill from there. you buy a house and furnish it, buy cars and things that you think you just can't do without and the next thing you know---WHAM!!! Bankruptcy

Answer 2

I was in serious debt after afailed marriage and my farming business hit a low after the foot and mouth outbreak. therfore money was not coming in as good as before but the same bills and credit facilities had to paid and animals fed etc. So, the overdraft was increased and extra credit cards applied for to get over the bad times. I have since made myself bankrupt and feel 100% better and can start to live on a carefully controlled budget and cannot legally obtain credit above £500, so I cannot spend more than I earn and cannot have credit. I will be discahrged after 8 months. So getting into debt is very easily done and exteremely hard to get out off. If you are young with no debt always look carefully before buying anything and think do you really need it and how will you manage to pay for it.

Answer 3

When you have kids you'll know where most of people's money goes !!

The thing is, people are so impatient these days to get things they want that instead of saving up, they will often get some form of credit whether it be a credit card, loan or hire purchase agreement. This is fine when, at the beginning of the agreement, you can afford the repayment amount but the problem often occurs when people's circumstances change and they are no longer able to make the repayments.

Also, there is now so much competition out there between credit card companies that they don't always seem to be that responsible about who they give a credit card to or what credit limit they give. Often, when someone reaches their limit, instead of the credit card company thinking 'this person is living beyond their means' they will often write to the customer offering a higher limit !!

Answer 4

I think the biggest point in time is when people go off to college. There were so many credit cards companies giving away credit cards and college kids who did not understand how to budget and thought that credit was free money. So by the time they finish with college they have amassed a huge debt and don;t know how to pay it back, especially with the high interest rate. There have been times where college kids have committed suicide because they couldn't keep up with the payments and were too embarrassed to tell their parents.

Answer 5

some just spend.
but a lot dont have a choice. if your pay at work is delayed or if you have somthing unexpected crop up. (hospital bills, your ar breaks down and need to be fixed ect). in these situations you might not have enough money in the bank. so what do you do? you still need food and heating ect. so people tke out a small loan or put it on a credit card.

if a lot of unexpected stuff happens, or the intrest is higher than you thought (a lot of people forget you have to pay intrest on last months intrest) then you can end up trpped in debt for life.

Answer 6

It really depends on the person. Some people are in debt because of loans (school, car, house, etc) others are in debt because they spend money on credit cards that they cannot afford to pay back. Basically everyone (adult) has some debt, the key is managing it and paying it back on time.

Answer 7

echo's top ten ways to stay out of debt:

10. Never get married
9. Never have kids
8. Never buy a car
7. Never get sick or go to a doctor or buy prescriptions if you should ignore this advice and get sick
6. Never eat out
5. Never buy a house
4. Never buy or rent - a house, furniture, electronics, movies etc.
3. Plan on being fired, laid off etc at least once in your life.
2. Only shop at thrift stores

And the number 1 way to stay out of debt:

1. Move to the mountains. Live in a cave. Never come down from the mountain. Go naked. Eat roots and berries for the rest of your life and you should be guaranteed never to be in debt.



Otherwise, hey............... life happens.

Answer 8

The main issue is you dont get told anything in School about credit cards etc and the intrest, Schools need to teach kids about all this stuff, Second i think i would be debt Free if i was told about this,

I thinks its because people want things now and don't want to save, so we end up getting in Debt,

Iv got myself in 9,000 Debt but to sort this out quick iv had to get 2 Jobs , working over 60hours aweek. :)

Answer 9

Because people are stupid.

People want to buy things they can't afford, so they get a credit card and buy a stereo, a big screen tv, 100 cd's, go out to eat at restaurants all the time, and so on.

Eventually they run up a $5000 debt on their credit card, and then they go try to get another credit card so they can borrow more.

When you get older, try not to do this.

Answer 10

Spending money on material possessions can be very addictive, and people get too caught up with spending, and eventually end up in debt.

Answer 11

Lots of reasons... Greed, necessity you name it.....
The worst thing I ever did besides getting married was to fall into the debt trap. I'm in huge trouble now but it wasn't all my fault.
The best advice I can give anyone is...
If you can't afford to buy something without getting into debt then you can't afford it at all!
Save your money & buy what you want when you've saved for it. You'll thank yourself in the long run & you'll know you've earned it at the end of the day.... Trust me.... I know what I'm talking about here!!