The Rising Cost of Basics
Another reason people fall into debt is a sign of the times. The basic things needed to survive such as food and shelter is becoming more expensive every year. The fault of debt no longer falls back on the thought that people are spending more on a plasma tv using their credit card.
Studies show that family incomes have remained flat for some time while expenses such as medical bills, housing food and cars have risen and since the income didn’t rise that causes some people to go into debt.
The debt of the typical American family earning about $45,000 a year rose 33.1 percent from 2001 to 2004, after adjusting for inflation, according to a study based on data compiled from the Federal Reserve Board’s most recent Survey of Consumer Finances. The Fed report, released in February, gave raw numbers on debt levels. The new study analyzed the data more closely to determine the sources of debt. It was conducted by the Center for American Progress, a Washington think tank run by former Clinton White House chief of staff John Podesta.
Falling Into The Pit of Debt
Why are millions of people going into debt each year? I’m sure for every 5 “experts” you ask you will probably get 10 different answers. The top one is something that I personally know is true when you look around at your, family and friends.
That reason would be living above your means. There is cable, rent to own products, multiple cars, vacations and many other things that are bought that aren’t necessary to live.
However the more technology changes the more new things comes out that everyone wants, regardless of whether or not they can really afford it in the long run.