kranky
Elite Member
- Oct 9, 1999
- 21,019
- 156
- 106
It happens for a couple reasons.
Some people literally can not grasp the magnitude of numbers and therefore are not able to comprehend their debt level. They know how much it is, but it has no meaning to them. And so they don't fear it.
More often, some people only relate their debt level to the minimum monthly payment. When they want a new big-screen TV, they see the cost as "$20 a month" and not the thousands it will eventually cost them. They don't think about the fact that they will be paying for that TV long after it's been replaced. New car? Hey, it's only $400 a month. You and I would want to know "OK, but for how long?" but that's an irrelevant detail to these people. As long as they can make the payments, they do not believe they have a debt problem. These are the people who generally do not have any savings because they are using everything they earn to make the payments. And when they get sick and miss a couple weeks of work, or their kid needs an ER visit, or they need a new roof, they are in meltdown mode.
And some people are like gambling addicts. They realize they are in over their heads, but count on some unspecified "miracle" to solve their problems down the road before it all caves in. A big bonus will show up... they will inherit a bundle from Aunt Martha when she kicks it... they are going to get a much higher paying job... that stock is going to really take off... so they rationalize away their debt because it's "only temporary". They fail to think about how that "miracle" they are counting on actually has a very low probability of happening.
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