How people fall into debt - Essay Example

9 March How people fall into debt? The process analysis: Overspending makes an individual fall into debt. In order to analyze the process through which an individual falls into debt, it is customary to study the ways and reasons for which people overspend. People have different reasons for overspending. In a vast majority of cases, causes of overspending find their origin in uncontrolled emotions. Besides, impulsivity is another primary reason of overspending (“Why People Fall”). Most of the people who overspend hold the concept, “Get it now or never!

” This conception is the fundamental factor on which the marketing cultivates. Competition is another key factor that encourages an individual to overspend. In the contemporary age, the world has become dangerously materialistic. Success is associated with the achievement and possession of material. Possession of material incurs cost. The more the material, the more successful a person is considered, and the more money gets spent. More often than not, people tend to maintain a life standard that is much above what they can afford in their income.

Even if a person does not value material, he is supposed to do that in order to comply with the norms, trends and traditions of the society. This change in attitude can be attributed to the fact that people tend to associate respect with materialism. A person possessing the latest model of technology of any sort is praised and appreciated. It is this praise that man longs for, thus ends up overspending. In addition to being materialistic, people in the present age have become increasingly impatient and intolerant.

What matters the most is present. Past is gone, and future is unseen. People can not wait to become richer. Therefore, they purchase things or facilities without having resources to compensate for them. Many people acquire loans to construct homes. The most commonly employed financial institutions that serve the purpose are banks. Banks offer loans by taking temporary hold of the borrower’s assets. In case the borrower is unable to return the loan, he/she loses the original assets, which happen to be his/her fundamental determinants of financial status.

In case he is able to pay the loan, he also has to accommodate the bank’s interest in his payment. The overload puts the borrower into debt. Another potential means of getting indebted is the use of credit card. Credit card provides an individual with the opportunity to shop beyond his/her current balance in the bank account. This is the most comfortable way of trapping an individual. The theory of credit cards makes use of the weakness of man that he wants material and is impatient. More often than not, credit cards prove to be more harmful for an individual than helpful.

Role of such factors as bank loans and use of credit card in indebting a person is facilitated by the basic trait of humans that they get used to things. A person that once gets loan to accommodate a temporary need gets used to borrowing and borrowing becomes his/her habit. All of these factors mutually function to make a person fall in debt. Works Cited: “Why People Fall into the Debt Trap.” 2011. Web. 9 Mar. 2011. .