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Actually it is the end result of poor financial planning, bad thinking habits and/or sadly, an unfortunate event that took place in our life. The tool used is the system of credit, the overuse of it. Too much credit is the ability to go into debt and too much debt is the inability to obtain more credit when needed, like buying a house.
Debt is a maggot that shows no discrimination in relation to social status, race, religion, etc. It has no demographic boundaries; it will feed upon and chew away the dignity and self-respect of anyone in its path. Debt starts out tiny, then it takes over and get out of control. Debt is not good, no matter how small it may appear, it is a system that have no feelings.
When does it appear and in what form? Certain things and events in our lives make us vulnerable to this maggot. Poor financial management skills are one source of when debt can appear into our lives. Not everyone has been taught the proper way of handling their finances, events in which we have no control over such as death of a spouse, loss of job or disability caused by an accident are without question, times in which debt can come into our lives.
It also can creep into our lives while we are wide-awake by tempting us with spending above our means. It can appear in the form of credit cards, car loans, and store brand charge cards, unsecured loans of various sorts and the now popular payday loans; these are just a few forms in which debt can appear.
We often rely on the tool credit to give us instant gratification, regardless if we can afford it or not. When we look at our finances that way, we become part of a trap that does not allow us to view the real cost of the things we purchase. Often times than not we rely on credit rather than trust ourselves to save our way to the things we want.
We start feeling nervous when the bills arrives and depressed when we realize there is not enough money to pay the bills in full, only part of the bills get paid and therefore, balances are carried over into the next cycle which will ultimately lead to finance charges. This process continues as you keep charging and borrowing, the next thing you know it has spiraled out of control and you lose your grip.
Ruby Wallace is the author of Being Smart About Credit and Debt
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