Some people get into debt by buying things they don’t need and can’t afford. What are the reasons for this behavior? What action can be taken to prevent people from having this problem?

Nowadays, people tend to buy a lot of things that they wouldn't need and end up owing huge amounts of money. In

this

essay, I will discuss the reasons for the same and the preventable actions that needs to be taken to solve

this

menace. In fact, there are many reasons why people indulge in extravagant spending beyond their means. One of the main reason is that, these days, it has become increasingly convenient to buy materials, with money that we do not own using the credit cards.

For instance

, it is widely known that credit card debts are the biggest form of debt in the country today.

Secondly

, people are often lured by the luxury offered by some of these products.

That is

, even if certain products are available at a smaller cost, individuals prefer to buy the product in the higher price range, just for their brand value and not because of their functionality.

Also

, people do not keep a track of their spending habits, which traps them to buy things beyond their means.

However

, there are ways by which we can help improve the situation. The most important one is to educate the masses to keep a track of their spending habit.

For example

, it is a well-known matter that financially literate people are less likely to fall into credit card and other financial traps because of their awareness and tracking habits.

Further

, people need to make it a point to spend on things that they badly require. Like the billionaire Warren Buffet's quote "if you start spending on things that you don't need, you would soon start selling things you need".

In addition

to it, budgeting their income upfront helps a lot in controlling unwanted expenses. In general, Credit card debts and other debts due to the extravagant retail spending, has stripped a lot of people of their freedom and relaxed life. It is increasingly becoming a cause of concern, the world over. But fortunately, there are ways we can take to improve the situation, which needs to be implemented effectively by the state.