Personal Budget Training: The Debt Cycle

Tuesday, May 20, 2008

The Debt Cycle

An interesting article on how the debt cycle travels with us through life.

Robert Manning, author of "Credit Card Nation," studied the financial spending habits of Americans across generations to discover what influences the spending in their specific age groups.

Debt life stages:

College: As the cost of higher education increases, more students are taking out loans, hoping to pay them off later in life.

Young singles: At a time when people do not have much money, they need it to get established not only in their jobs, but lifestyles too.

Young families: Having children can stretch finances to the breaking point when you are not planning ahead for expenses.

Mature families: A time of relative security, but maybe too much spending due to a false sense of security.

Empty nesters: Now it is time to help the grown-up kids, or going deeper in debt with travel or giant purchases.

Retirees: Time to relax? Maybe.

How do you keep the ugly debt cycle away? Simple, discipline yourself like Paul Navone and follow a budget. As the saying goes, proper prior planning prevents poor performance.

Labels: Debt, money saving tip