Lesson 2: In our ongoing Wealth Wisdom video series, we’ll teach you financial fundamentals. In this second lesson, Terry Kuykendall, a budget analyst for the military, will explain how people get into debt:
Here are reasons people get into debt described in the video:
- Debt happens when people begin overspending or trying to live beyond their means.
- You must develop a budget designed for you and free from how anyone else lives.
- Find out what you make each month and what you need to spend.
- If there’s no extra money in your budget, then you have no room for frivolous spending (clothes, makeup, electronics, etc).
- Another reason for debt is the temptation to use credit.
- Charging up credit cards decreases the amount of disposable income you have to spend each month.
- In summary, most people get into debt by not living on a budget and racking up credit card bills.
Learn More: This is a good explanation of why people fall into debt. If you’d like to learn how to get out of debt, visit our Debt Elimination section.
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