Debt is something just about everyone has. It might be a small amount or a large amount but it is very common. Debt can be classified and good or bad. Typically debt used for educational purposes, investment purposes or to purchase a home would be considered good debt. Debt used for frivolous purchases and those that you can't afford would be classified as bad debt.
Both good debt and bad debt can be a problem for people but usually those sinking into serious debt problems typically have bad debt cause by consumer overspending. People with debt problems often have commonalities and recognizing the warning signs of debt problems can be a significant first step in resolving the debt issues.
Debt issues or indebtedness is very common and not something to be ashamed of. More people than you think have had debt issues at one point or another in their lifetimes.
The following traits are often warning indicators of debt problems:
- Emotional Problems - perhaps the person has a need for instant gratification or buys impulsively to achieve an emotional high.
- Uses money to punish - for example a spouse who purchases an expensive item to get back at the other.
- The hope of comfort - some people feel that acquiring items that would take years to save for can bring immediate comfort mow.
- Keeping up with the Joneses - this is a very common scenario. Everyone wants to fit in with their peers. What most of us don't realize is our peers can't afford it either.
- Spoiling Children - this is a tough one for parents. For some it seems that buying for children eliminates the need for careful planning.
- Lack of communication among family - consult each other on big purchases and don't be afraid to speak up when the wallet should be put away.
There are organizations in place to help those that have gotten in over their financial heads but often by the time an individual seeks an organization like this out it can be too late.
If you are just getting started with credit - get educated and use it wisely and you will reap the financial benefits.