What makes people spend the money they don't have?

Question

I've been wondering how exactly people get into big credit card debt - what motivates them or what do they feel by doing it? What makes them take loans for vacations or new cars they cannot afford? I am not seeking to pass judgment here, but if you are currently in this kind of debt or ever been there, could you describe what made you do it and did you get more satisfaction spending money or more frustration repaying it? How old were you at the time and did your views change, or would you do it again? What did you buy with the money and why?

I am not talkinh here about debts caused by certain life circumstances - student loans, unplanned medical expenses and alike.

Answer 1

I think its the "keeping up with the Jones's" complex. We are constantly bombarded with adds telling us we must have this or that and some people feel it is their right to get it. Plus credit card companies will basically give a card to anyone with a pulse, they don't really care if you need/can afford to have the card.

We live debt free and my wife is always commenting "how come so and so has this or that and we don't" and I need to remind her that the person is probably using/owing credit where we use cash. I enjoy paying our cards off in full each month and cannot imagine going into the hole with the credit card companies.

Answer 2

I will admit, my husband and I are getting out of debt. He was in school full time and did not apply for a school loan in time, so we had to put it on a credit card. That was our first mistake.

After he graduated, he had to wait a year and a half before he was able to find his first professional job. (He graduated right before 9/11, the fall of Enron, the fall of the stock market, etc...) The job market was pretty much in the crapper. I had a decent but low paying state job (even though I have a B.S.) with benefits but we had some pretty major expenses that were out of our control (mostly car repairs, etc...) so we used the credit cards because we did not have the means to pay any other way. Kind of a double edged sword. Could we have "saved" up the money? Sure...but at what cost? We needed transportation to get me to my job so I could pay the majority of the bills and so my husband could finish school and work part time so he could get out of school and get a better job. Living in a commuter city does not help the problem any either. I would have loved to walk to work, or ride city transportation, but that was not an option.

I think for some individuals, like myself, it really isn't a matter of buying things that we wanted and not really needing it. It is a matter of keeping our heads above water in a time of crisis.

I think it is really unfair to assume everyone that has debt, has debt because of immaturity or bad spending habits. Sometimes, crap happens and you have to take a step back to get a step ahead.

Answer 3

For starters I think this is kind of like the guns don't kill people argument people. Kill people in the sense that Americans and now the world is being bombarded with media and messages of inadequacy and such and such and that credit card is a symbol of solving this, yet usually the opposite result is the case.

If Globalization ever does succeed, the world will indeed be a sad place, everyone armed with their credit card ready to out do the other. :)

Also to comment on the bottom comment:

Unsecured debt can not be inherited although you better believe they creditors will try and collect from your offspring, they are under no obligation to pay for unsecured debt and can event refuse to inherit overextended secured debt.

Answer 4

My dumbass sister is one of those people buying things on credit. She has $72,000 worth of debt and that does include her car but she is not a home owner. The rest of the debt other than the car is credit card debt. She wants something so she goes and charges it or finances it. She is constantly trying to be better than me and have nicer things than me. I got a new car so she bought a new truck. I got a new entertainment center so she bought a new sofa, loveseat and entertainment center. Hers cost more money and all so she thinks I should be jealous of what she has. She spent about 3000$ on her kids for Christmas but all of it was charged. She constantly asks me why I dont get new couches and whatnot and I told her I can't afford it so she says if I want something I go get it. My response was at least what I have is mine and I own it all and your stuff won't be paid off in your lifetime, you will pass your debt down to your kids when you die.

Answer 5

Marketing, the sense you got to have what's hot in the market, whats in fashion, the best vacations... things like that. the purpose of marketing is to create a need in the consumer so that he goes to buy the product without thinking in how much it will cost because the buyer has to have it no matter what to fit in the society.... is like brain washing by the industry. ohh i have a debt because i spend more that i had with my credit card, but my new resolution was to try to be more conscious about the money and focus more in what is really a need.