There is a number of reasons why debt comes to our lives. However, some items and behaviours can highlight some red flags.
How: Credit Cards (household debt) mainly, because they are such a great convenience. Marketers know customers have great weaknesses for sales and for beautiful looking things. A picture of a tropical beach or a restaurant with a table full of food stimulates the mind into a spending frenzy. We just want what is in the pictures. Out comes the wallet and we start buying even if the cash is not there. Sales also get people into lots of trouble. New TVs, new computers, new cars, home renovations and the like often require some debt but far too often there aren't enough savings to cover the cost. Our plastic friend may come in handy many times; unfortunately using it too much can get finances out of control.
Why: We are too tempted but too often we buy out of our price range. We buy the dress that cost more than budgeted for. We buy the phone with more bells and whistles. We look at a car and then add on too many accessories. We are not good at controlling ourselves and we overspend. We want to show off for friends, make an entrance or just be accepted for what we think are the standards. We get instant gratification and it feels great.
What: besides household debt (credit cards), another major debt issue is further education. Education has become more and more expensive. Kids just seem to be loading up on loans and that means that once they graduate the first thing they have to worry about is getting a job to pay off loans. Not a great start to life.
When: Often, we pile up consumer debt because we believe the marketing myths. No one thing is going to make your life better: not a purse, the latest phone or new underwear from Victoria's Secret.
Remember, life is not an episode of "Keeping up with the Kardashians", even though, that would be nice.
Where: In the old days: shopping malls, major department stores, big box stores, grocery stores and of course any store that fits your fancy. Nowadays: Amazon, eBay, and all of the other sites that sell everything that your heart desires. The internet became our shopping playground. We order stuff and put it on the credit card.
How much: here is the tricky part. You can spend under your budget (good for you!) or a bit over, but once you crossed that thin red line without holding back that will lead you to a debt pile that you may or may not recover from.
Remember that it is much easier to sleep at night with no debt than it is to have trouble sleeping because you don't have the latest electronic gizmo. It has been proven that people with no debt are much happier than people with debt!