Spending and Coping Patterns – How Behaviors Can Cause Debt Problems
Each of us has motivations for our choices and behaviors. At Credit Advisors Foundation, the credit counselors help you understand the motivation behind your spending habits and current coping mechanisms. Through this process our clients are empowered to make changes by harnessing their resources and strengths, overcoming obstacles, and learning successful problem solving.
We can examine some reasons why people over spend, but the significance is not in labeling but in understanding and changing the resulting behaviors to those that support our efforts to reach set financial goals. By assisting you to identify stumbling blocks, a CAF credit counselor can encourage, support, and recognize positive steps you make as you work through your action plan toward achieving these goals.
Why, besides basic overspending, do consumers get into debt? First, many are uninformed or ill informed. (CAF community educational programs attempt to alleviate this knowledge gap.) Often consumers simply do not know enough about credit, interest rates, terms, and so on to make thoughtful, informed credit decisions. Today, there is also unprecedented access to our money and to credit. Through ATMs, debit cards, and Internet banking, consumers have 24-hour access to the funds in their accounts and the ability to spend it. Most households receive pre-approved credit offers in the mail daily; putting credit availability at our fingertips. Our culture of consumerism, media advertising bombardment, and the churn and burn attitude towards the products and services we purchase does little to slow or limit spending. Many seemingly innocent businesses in the technology realm incorporate every-6-months-new-product cycles into their business plans, counting on consumers’ desire to own anything ‘new and improved’.
People with good credit standing can suddenly find themselves floundering in debt issues for a variety of reasons. A lack of financial literacy, inattention to debt issues, or unforeseen catastrophic events can leave even the most stable debtor in trouble.
How do consumers deal with debt issues? Many simply freak out. They don’t have a plan, don’t know how to make a plan, and may pounce on the first option available (such as borrowing from one creditor to pay another). Some consumers fall into denial. The unspoken belief is that if they ignore their debt issues, they will eventually go away. Unfortunately this rarely happens.
Some consumers, however, come to the logical conclusion that they at least need information on how to handle their current debt problems. (We at CAF come into the picture here also.) At CAF they will learn what they need to know to resolve the problems and get the help they need to reach their goals. Of course, there are always those who will never take responsibility for their credit and coping choices, giving up their power in blaming others, even those attempting to assist them in their efforts to overcome the obstacles that contributed to their situations.
Finding themselves with credit and debt problems can of course be very stressful for most consumers. The stress related to delinquent debt and overspending can be extremely taxing to consumers in physical, mental, and emotional ways at home or at work. Learning ways to deal with these issues, and in the process handle the related stress, can be extremely empowering. This is especially true when you have the support of credit counselors like those at CAF to explain the options and alternatives available to you, and to help you learn new ways of coping with credit and debt.
Credit counselors who understand how consumers find themselves in these situations are better able to assist in building the necessary bridges and connections towards more positive outcomes. CAF, through the educational presentations and the debt management programs we offer, will continue to assist consumers to gain greater knowledge and through knowledge, the power they need to resolve their issues and achieve their goals.