Americans today are falling into all kind of debt. There are many reasons someone can fall into such an unconfutable situation. Many things can lead into debt such as poor money management, reduced income, and having weak saving habits. Falling into debt can be prevented by changing saving habits, realizing what’s a necessity and what’s not as well as budgeting yourself wisely. Becoming in debt can change the lives around you as well as your own.
Managing your money wisely is the most important thing to do when not trying to fall into debt. You must have your own spending plan so you are award at all times what money is coming in and how much moneys going out. Based on this you will know how much money you have left to spend on other things
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Having a saving account already set is very important. Even more so if your married and children are in the picture you never know when a relationship can go wrong and a divorce can be filed. Having money saved up the right way can prevent you from losing your house and everything else meaningful to you. In a lot of cases people begin to start saving and then as soon as they think they saved a good amount they use it or stop saving. Everyone is different and has different ways of doing things when it comes to money but anyone can fall into debt at whatever time.so you most take preventions.
Falling into debt is something someone doesn’t expect but they can see it coming. Everyone knows there responsible to pay bills on time and they should have an idea of what they should and shouldn’t be wasting. The leading causes of debt are poor money management, reduced of income which can happen to anyone unexpectedly so you must always be prepared and you must stay on track with your savings account. Don’t let laziness or pride ruin your whole future ahead of you stay on top of your money at all times so you don’t fall into debt. It can be preventing studies shows its
Every day in New York City, hundreds of people walk past a huge digital billboard with giant numbers across its face. Each person who walks past this billboard sees a slightly different arrangement of numbers, growing larger every second. This board is the National Debt Clock, representing the over 14 trillion dollars currently owed by the United States. While some people claim that the national debt is caused by the falling economy, most maintain that the debt itself causes the poor economy (Budget Deficits 2007). Rising debt leads to higher interest and investment rates, and cuts into our national savings. Ignoring the national debt leaves the major burden of paying it off to later generations, while meanwhile allowing our country’s economy to further drop and our dependency on other nations to rise.
Generation Debt by Anya Kamenetz discusses how people in my generation and below are born into debt. Kamenetz is a yale graduate who is having trouble finding a job after graduation. She mentions that “debt is inevitable” in our generation with college prices raising. She made her way through by her parent’s rules of spending no more than you earn and paying off the one credit card she owns. She also elaborates on the stigma that comes with being a young adult. How our generation is branded “immature” and “lazy” without a second look at our actual personalities. Also taking the time to point out that we work hard to get by and try to make ends meet without drowning in our inevitable debt.
Student debt today is at it’s worse, as it doesn’t matter who you are, your circumstances, or your status; if you have a student loan debt, by default you can’t lose everything. The government will not let you file bankruptcy, as people like Sallie Mac made sure of by paying lobbyists millions of dollars.
All but four countries in the world has external debt (“Country Comparison: Debt External”). Having a debt is almost as common as having a mortgage. Since its establishment, The United States has always been in debt (“Historical Debt Outstanding – Annual”). The US national debt has had five sharp increases previously in its history. The reasons include civil car and the two World W...
Why has our generation become so immersed in debt? Student loans are a major contributing factor. 40 million Americans now hold student loan debts (The Institute). In 2014 the average student loan debt per student was $28,950 (The Institute). However these numbers are declining, student loan debt is and has been continuously rising each and every year. If a student wanted to pay off their $28,950 of debt off in 5 years they would have to pay $559.68 month. To put this in perspective, 559.68 is more than the average car payment. Even if students wanted to pay off their loan in 10 years they would still have to pay $321.40. This is 10 years of hard earned money that students will never get to see because of the cost of education.
We now live in a society where kids start their adult lives “in the red”, as their debt exceeds their income. (Draut, 2005) 60 years ago this wasn’t the case, as told by Studs Terkel in Hard Times-An Oral History of The Great Depression, “I had no idea how long $30 would last, but it sure would have to go a long way because I had nothing else. The semester fee was $22, so that left me $8 to go.” (Turkel, 1970) Imagine that! 60 years ago tuition was $22 dollars a semester! Furthermore, 45% of adults under 35 state they find themselves resorting to credit card use for basic living expenses like rent, groceries and utilities, (Draut, 2005) adding to their mounting debt. This use of credit puts them into an entirely different category of indebtedness: survival debt. (Draut, 2005) Imagine being forced to borrow to live! (Draut, 2005) If a car breaks down or someone gets sick, the only option available is using a credit card. (Draut,
...ep the money in the bank because the bank is the safest places to keep money. In addition, investing money in stock is the best way to make the business grow because stocks have the highest returns of any asset. Lesson 9 is full of important information about credit -card debt. According to the lesson 9, “The average American household with at least one credit card has nearly $15,950 in credit-card debt”. People borrow a lot of money that they cannot afford to pay back. Falling into a debt is the fastest way that people face because some people use their credit card for meals and vacations, but they cannot afford to pay off their monthly bills. Thus, people should write everything they spend for a month because a lot of people spend thousands of money without thinking about what they are buying in order to start saving the money and reduce the debt quickly.
Investing vs. Paying Off Debt These days it is not unusual to be over-burdened by debt. Whether it’s chiseling away at student loans, the monthly car payment, mortgage, credit card or medical, it seems as if most Americans have some level of debt. Those who are just barely getting by logically conclude that paying off debt is the highest priority after the basic needs are met. From an emotional standpoint it may be exhilarating to know that you are free of debt, but there may be another alternative: investing.
Building a financial literacy for your children is important. Giving them an allowance will help you do that. An allowance will give kids a chance to experience dealing with money before it becomes a crucial thing for them to know. The more practice and time they have dealing with money, the easier it will be for them to handle it as they get older. It will also give them more time to learn and perfect budgeting skills. Giving your child this skill early in life can help prevent complications when they are on their own. It is important to learn early on that you must work hard for the things you want. Your parents won't always be there to help you out.
...gency (CCMA) (2012), the main reasons people fail to pay a debt were poor financial planning (25%), high medical expenses (22%), business failures or slowdowns (15%), loss of control on the usage of credit cards (13%), and loss of jobs or retrenchments (10%). Therefore, Lea, Webley and Walker (1995) found that debt with economic, social and psychology factor are closely related.
In conclusion, the best way to manage your money is to keep a budget and record all your transaction to see where your money is going. Living with a budget isn’t the easiest thing in the world, but it can be a great alternative to worrying about how you are going to pay for your expenses. Budgeting allows you to create a spending plan for your money; it ensures that you will always have money for the things that are important to you. Following a budget will also keep you out of debt. If you don’t balance your budget and spend more than you make, you will have financial problems. Many people don’t realize that they spend more than they earn and slowly sink deeper into debt every year.
Mortgages, car loans, student loans, and having children, are all situations that can drive families to the overwhelming doom of debt. Debt is mostly overlooked for the simple reason that it may be considered normal. Certain types of debt, like car and mortgage payments, are almost always expected. Debt is sometimes very difficult to evade, especially if money is not managed sensibly. Many families accumulate debt due to overspending, medical bills, and unemployment.
Some of the arguments in the article say that the reason why people are in debt is because expenses are higher now than they were in the 1970 's. Another argument is that we are living in a materialistic place, especially in California and New York. Everybody wants to look good and have the best, so they use their credit card to make these expenses. Some arguments blame teens for using credit cards. Teens already use credit cards and spend money. Banks and financial institutions are also blamed for the rise in credit card debt because they lower monthly payments on credit cards. Others just think that Americans are comfortable with having credit card debts.
In today’s world young people are using debt to live what they think is the easy life, buying unnecessary items to keep up with the latest trends, partying, and switching from credit card to credit card to pay off racked up bills. In my opinion young people lack the knowledge, and understanding of how credit works, and what it takes to keep up with the responsibilities of owning a credit card. Another reason young people are getting into debt is from college loans. Some students jump from school to school unsure of what career they want to pursue, and some jump from school to school using financial aid to obtain the luxuries they couldn’t normally afford. I think the biggest reason of all for the debt accrued in the early years of adulthood though is irresponsibility. Young people get into debt because they lack knowledge, have many student loans, and are irresponsible when it comes to handling debt.
I do not want to experience the serious problem of unpaid debts and bankruptcy when I am grown up. We should not have excuses to spending lavishly. Prudent spending is always wise. After all, it is better to save that money for a rainy day than to spend it foolishly.