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5 Reasons Why People Are Taking on More Debt

It doesn’t make any sense does it? Just eight years ago, our nation saw one of the most devastating recessions in history, but now it seems like we’ve so quickly forgotten what put us there in the first place. Not only has personal debt been increasing over the last couple of years, it’s once again inching toward the all-time high.

taking on more debt

5 Reasons Why People Are Taking On More Debt

There’s no doubt about it – people are taking on more debt, but why? Why would they put themselves at risk again? Are we all just so vain that we’d rather be up to our eyeballs in debt than to let people know that we’re broke? For some of us, absolutely yes. For others, the reasons are a bit more real than that.

1) More Confidence in the Economy

Just eight years ago, the Dow was at $6,500. Since then, the market has propelled forward, breaking records for new highs – and it still remains quite strong today. People are becoming more comfortable with the economic stability of our nation and therefore are more comfortable with their jobs.

People are taking on more debt basically because they’re less concerned that the economy will take another dive. They feel secure with their work, their income, and can cover their payments.

2) College Debt is Almost a Must

In our workforce today the general human resource mantra is, “If you haven’t graduated from college, then you’re probably not worth hiring.”

people are taking on more debt

It’s really pretty sad that we’re requiring college degrees for work that can be learned on the job quite easily. But, that’s the way of the world. We can’t fight it, so off we go to get a college degree. It seems simple enough, but when the cost of college continues to skyrocket, the more unrealistic it is that we’ll pay for it out of pocket. So up goes the debt load….

3) New Cars Are More of a Draw Now Than Ever

The general consensus has been that Millennials don’t care too much about what the general public thinks of them. They think what they want, do what they want, and buy what they want. You’d assume that they wouldn’t be drawn to buying a new car…but you’d be wrong.

More and more millennials are taking on debt to buy a brand new ride, but it’s not to impress their friends or coworkers, it’s to live more green and to push cool buttons. Seriously.

people are taking on more debt

Millennials care about the earth and don’t want to damage its beauty. Therefore, they’re not going to buy a 10 year old car that gets poor gas mileage. Instead, they’re going to be interested in a brand new hybrid or electric vehicle that protects the environment.

The other side of it is the cool buttons. Millennials love their gadgets, and now those gadgets are making their way into new cars. The coolness factor is rising in the recent model cars, so more of us are buying them up and using credit to do it.

4) House Values Are Up

Home values are up….which is great for homeowners that eventually want to sell and downsize. But what about those of us that need to buy a larger house or that don’t currently own a house at all yet? Then the rising value of homes is simply killing our future wallet.

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On top of rising home prices, people are taking on more debt because they simply aren’t earning more. Their paychecks are stagnant but the cost of housing keeps rising, which ultimately makes for a higher debt situation…

5) An Increased Cost of Living

Finally, people are taking on more debt because the cost to live just keeps going up! Over the past 12 years (think about that…12 years!), the rise in the cost of living has outpaced income growth.

Since 2003, medical costs have grown by 51% and food and beverage increased by 37%. Those increases are massive when you consider that our income has been fairly stagnant. The result? People are taking on more debt.

Don’t Use This As An Excuse

There are so many people out there that find the “reasons” for their misfortune and talk about it every single day until the day they die. What a sad way to live. Sure, we could look at our situation and state that we have massive debts because houses are too expensive and we can’t get a raise at work, but what good is that going to do you? It won’t make you more more, it won’t reduce your bills, and it certainly won’t make you more happy.

Don’t use these reasons as an excuse.

Instead, choose to rise above these circumstances. Understand that for every couple of people that lay down and accept their life of debt and mediocrity, there is one that chooses to say “NO!”. Instead of laying down, they push their way up and find a way out. New millionaires are made every day, so why aren’t you one of them? Everyone has a shot at wealth. You just have to stand up and accept the challenge.

In general, people are taking on more debt. I say choose to be different. Choose freedom. Choose wealth.

Get Out of Debt Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Unfortunately many people consider debt to be inevitable and just part of life. As you mention, it doesn’t need to be. Since paying off our mortgage nearly 10 years ago, we’ve been totally debt free and loving it! While it can’t be quantified, the freedom is priceless….much more valuable than simply having more stuff.

    Always explore debt free options before simply assuming you HAVE to go into debt for something. Usually there is a better way……


    • Yup, I hear it all the time…”debt is just a way of life”. Totally not true, but most people don’t really want to hear it. They just want all their shiny stuff and to be considered “normal” for having the debt. I’m with you John. I prefer less shiny stuff and thousands of additional options in life!

  2. I really wish that someday teenagers will be taught personal finance and be able to understand that debt is not a part of life. You don’t need a great credit score with an amazing credit history. You can live a happy debt free life. There’s too much money to be made by the corporations that profit from our taking on debt. The mortgage industry and credit card companies won’t allow future generations to know that debt is not essential. It can be a tool, but that can be very dangerous for those who do not educate themselves.

    • Totally agree Brad. For many, debt is totally unnecessary in life and should not be perceived as a given. It’s up to people like us to educate all those young folks that have been misinformed!

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