Implications of Debt

Debt can cause financial and personal harm of such a degree that it can severely affect one's life. Debt can eat into a monthly budget, making it more difficult to afford the things we want or need. Moreover, because debt can adversely affect credit scores, high debt levels can make it more difficult to get a new job. In addition, it can increase the interest rates applied to new debt, which can make it even more difficult to pay bills. All of these issues can lead to personal and marital stresses beyond that of the debt itself.

Debt Can Consume a Budget

Monthly debt payments are dollars you cannot spend on something else, be it necessity or luxury. The implications of high debt bills can be severe. Devoting large amounts to paying off debt means it is more difficult to save, it is harder to pay for necessities, and can cause you to add new debt to pay the bills. Therefore, it is critical to keep debt at manageable levels and to minimize other expenses to assure you can pay down your debt promptly.

Debt Can Limit Job Possibilities

Increasingly, employers are examining credit scores in the selection of new employees. High levels of debt cause credit scores to be lower and therefore can impair the ability to find a new job. The implications of this are clear: for the unemployed with high debt levels, a new job becomes more difficult to acquire and for those who want a better paying job, high debt can leave you stuck in your current job.

Makes New Purchases More Costly

High debt will lower your credit score, which leads to higher interest rates on new debt. As interest rates increase, it becomes more difficult to pay off what you owe. This is because payments increasingly go toward interest instead of paying down principal. In this respect, debt begets debt.

Damage to Personal Life

Many people enter marriages with substantial debts that affect their spouses. The financial implications can cause fighting and stress for a couple. Likewise, adding debt during a marriage through overspending can cause severe problems in a relationship. All of these issues make debt a source of marital stress that couples need to calmly discuss, resolve and not ignore.