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How People Get Into Debt

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From Quick Guide: Debt Forgiveness Explained

Summary: People get themselves into debt by overspending, abusing credit cards and by wanting to live beyond their means. Develop a budget to avoid going into debt with help from a business analyst in this free video on financial planning and debt management.

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By Terry Kuykendall
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Terry Kuykendall is currently a budget analyst for the military in Washington. She is an accountant who has worked at firms helping people deal with personal and business debt.read more

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Video Transcript

"People get themselves into debt by overspending, by wanting to live beyond their means, quote unquote, keeping up with the Joneses. So the biggest thing is to develop a budget, what you're bringing in each month, what has to go out as far as everyday bills, groceries, electricity, and finding out what you've got left over to do the frivolous things in life. If it's not that much money, then it's not going to be that frivolous and you obviously don't need it. So people get themselves into debt that way as well as the temptation to use credit. Credit is a huge temptation in this country and by charging up credit cards you are decreasing your monthly amount of money that you have disposable to you, so stay out of... stay away from credit cards and live on a budget. By not doing that is how people can get themselves into debt. So the two main reasons people get themselves into debt: one, not living on a budget, and two, by racking up credit card bills which are going to decrease the amount of disposable income they have available to live off of each month."

eHow Article: How People Get Into Debt

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