The number of people in debt is staggering; according to MSN, about 43 percent of American families spend more than they make each year, driving them deeper into debt. People get into debt in a variety of ways, including credit cards, student loans, medical bills or financed purchases that were not paid off in time. While some debt is necessary, like paying medical bills, debt should generally be avoided for a number of reasons.
Stress
With debt comes unnecessary stress, anxiety, sleepless nights and even depression. All of these emotional strains can escalate to various mental and physical problems. Living under a mountain of debt adds pressure to people to work harder to get out of debt, which in turn leads to a more stressful daily life.
Marital Problems
Married couples that are in debt have a higher chance of getting divorced, as finances are one of leading causes of divorce for couples. It is normal for couples to discuss and even argue over finances; however, too often these discussions can turn into heated fights. Consistent fights over financial struggles add a strain to your marriage.
Future Investments
Individuals in debt do not have as much, if any, money freed up to follow their dreams of buying a house or car, starting new business ventures, enjoying various entertainment or taking vacations. Debt can jeopardize your kid's college fund, your savings and retirement plans, truly sabotaging the future of the individuals in debt and their children.
Emergencies
When you are spending more than you earn on paying down debt and paying other expenses, there is no free money to put aside in case of emergencies repairs, health emergencies or home maintenance. These things can really put individuals in compromising situations and even more debt if there is an emergency.
Interest
Debt interest can mount over the years; some individuals might even spend a lifetime paying off interest on items purchased in the past. Even if items can be resold to ease some of the financial burden, the item will be worth much less that its original price tag, and you will take a loss on the item.
Health
As debt and interest begin to mount, there will be less money for healthy foods, medicines and vitamins; exercise activities like gym memberships and yoga classes; or hobbies like skiing. This will in turn affect the overall well being of any person trying to get healthy or add physical activity into their lives.
Freedom
Many people in debt have become prisoners of their own debt, as they are not financially free to enjoy things like dining out or going to a movie. Even with healthier debt, such as student loans or a mortgage, people are committing to a long-term debt, which can take a lifetime to pay off and thus limit where you can spend your hard-earned money.
Progress
Debt will definitely slow down a person's financial progress. This includes long-term investment or savings goals, relocation and overall upgrades to your life. In order to progress financially, people in debt need to do more work to try to keep the debt under control and still save for a new house or car.
Bad Credit
Excessive debt has a negative effect on your credit score. People with a large amount of debt will not be approved for home, auto or personal loans.
Retirement
The average government retirement payment is just over $1,000 per month, which in most cases is not enough to live on. Debt takes any extra money that could be stored away for retirement. It is advised that people take charge of their own retirement savings instead of leaving it to the government. But, if you are under a mountain of debt, it is hard to find any money to put away for retirement.
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