We have had programmes on the TV where people have had to have counsiling to manage their debts. Young people filing for Bankruptcy because of their debt, and so on. Why can't people manage their finances, and budget their money better, WHY.
2006-12-29 12:26:30 · 36 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
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!
2006-12-29 12:30:42 · answer #1 · answered by Kris 4 · 2⤊ 0⤋
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
2006-12-29 12:45:19 · answer #2 · answered by bennyboyuk1980 1 · 3⤊ 0⤋
First people need to understand the difference betwee a NEED and a WANT.
A NEED is something that is required to sustain life and basic necessities (i.e. house payment or rent, groceries, electric bill, etc.)
A WANT is something that makes life more enjoyable. (i.e. nicer car vs a basic car, new flat screen LCD TV vs the TV you have that is working fine, a new item just because so and so has one, etc.)
I WANT a new IPod but I NEED to pay the electric bill. This is a good example of a want versus a need.
People are too busy keeping up with what marketers say they need instead of analyzing what they have and making sure they can afford what they have before buying something new. The same can be said for "going out"...how much can you really afford to pay for a night out? I understand that we all like to be entertained and go out with our friends but what's wrong with having a "pot luck" dinner at home with them and everyone contributing to the evening's food and entertainment? Sharing the cost is much more economical and you still have time to enjoy with your friends!
Being sensible about purchases and making sure that one's basic needs are met is what is needed but that would mean a self control must be enacted on a daily basis and too many people don't want to do that!
2006-12-30 07:14:06 · answer #3 · answered by Inquisitive125 3 · 0⤊ 0⤋
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.
2006-12-29 12:36:56 · answer #4 · answered by Anonymous · 1⤊ 0⤋
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!
2006-12-29 14:00:00 · answer #5 · answered by NATALIE W 3 · 0⤊ 0⤋
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!)
2006-12-30 06:22:51 · answer #6 · answered by alliea99 2 · 0⤊ 0⤋
scotty said it correct!, they first pray on college students. They get in there head to charge everything and having the time of their lives just thinking they are going to pay it off when they get those high paying jobs. Then once they do graduate life happens and that debt just keeps on incurring. The other think that the country is in soo much debt, that is where the public feels it is OK to be in debt.
2006-12-29 16:34:39 · answer #7 · answered by Anonymous · 0⤊ 0⤋
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.
2006-12-29 12:34:02 · answer #8 · answered by CouchPotato 2 · 1⤊ 0⤋
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.
2006-12-29 12:38:07 · answer #9 · answered by Joe S 6 · 1⤊ 0⤋
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.
2006-12-29 12:31:26 · answer #10 · answered by doodlenatty 4 · 1⤊ 0⤋