Debt Problems

Why do People go into Debt for?

My nephew had a great job ,his wife too ,but he thought he needed things that he couldnt afford ,like a big screen tv ,a 2,000 dollar computer ,a giant house ,2 cars,,lots of shopping ,when the bills started coming in he wouldnt pay them ,so now the creditors are hounding him so he decided that running away would solve the problems ,well they are still there ,and his wife is left to struggle ,so tell me why do people go into debt if they cant pay for the stuff?

Public Comments

1. Because even smart people do stupid stuff.
2. -They don't understand the difference between need and want. -We have created a society of consumers who believe they are entitled to have whatever they want whenever they want just because their neighbor/friend/coworker has it -a lot of smart people are financially illiterate -they listen to the hype and don't read the fine print (who ACTUALLY thought an interest only, adjustable rate mortgage was a GOOD idea??? only people who didn't bother to read the loan documents they were signing) -they think bankruptcy is no big deal -they couldn't balance their checkbook if they tried and have no concept of money management -they believe available credit on a credit card is almost the same as money in the bank.....it all spends the same, right? -they are eternal optimists who believe that things will only get better and they will always have money flowing in -they fail to plan -they're scared to look at their true financial state There are a lot of reasons people go into debt. Debt and financial matter are some of the most sensitive topics to talk about. Many people feel defined by their stuff. If you tell them they can't afford to buy stuff, they can't handle that concept. Not all debt is bad. Student loans can be ok, a reasonable car loan can be ok, a reasonable mortgage on a sensible home can be ok. But you have to be smart. Qualifying for a loan is NOT the same as being able to afford that loan. A lot of people borrowed the absolute maximum instead of assessing what they really needed in a home/car/television and making a smaller purchase where they would have been able to handle the payments. They were blinded by their greed for stuff.
3. It's called keeping up with the Joneses. We see it in movies, on TV and in ads. We need this, we need that, we need everything else. And if our neighbor gets is, we need better one. Some folks are mature and bright enough to not get too much into debt, apparently your nephew is not one of them.
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