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The reasons why people get into debt are not always simpleThere are myriad reasons for why people get into debt: Many people get into debt due to circumstances beyond their control. Changes in life circumstances happen - people lose their jobs, or the overtime they were relying upon.
People also suffer bereavements or their relationships fall apart making it impossible for them to meet their committments. One of the leading causes stated for bankruptcies is an inability to pay high medical bills. Even the easy and most obvious answer - because people simply spend more money than they earn, may not be as simple as it seems. According to Iowa State University professor Dr. Tahira K. Hira, debt isn't just an indication of how much a person spends, but it may also be an indication of their emotional state. Hira did research through the Canadian consumer bankruptcy office in the 1990's and found that most people who filed for bankruptcy had very low self esteem, and had experienced one or both parents were absent either physically or emotionally. In contrast, in other research she found that students who were most comfortable dealing with money had had a pleasant growing up experience, had come from an intact family and had had a positive money experience at a young age, often with a parent helping them to open a bank account and plan for a goal. Other emotional reasons may also compel people to spend more than they can afford, including stress and impulsiveness. Hira also states that many consumers who use credit cards have no idea of what things cost. She suggests that people go for at least one week paying for everything with cash - and she guarantees that people will find it much harder to spend when they have to part with cold hard cash.
However, Hira also notes that the traditional way of dealing with debt - negotiating with
creditors and working out a debt repayment schedule - will not help change negative
behavior patterns.
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