A simple answer would be: Americans have debt problems because they borrow more money than they can afford to pay back. If only reality were that simple.

The reasons people go into debt are as varied and complicated as the individuals themselves. Some people go into debt after experiencing a genuine hardship such as a divorce, catastrophic health issues, death or job loss – while others have yet to develop money management skills and spend as if their supply is endless.

Consider some common reasons people go into debt and how we can all learn from their mistakes:

• Confusing wants and needs
  Analyze your purchases and ask yourself how many were things you need, rather than things you simple want. If you make a purchase to reward yourself, the item is more than likely something you want rather than need. A purse may be a reasonable purchase if you don’t have one – but buying a $1,600 Fendi bag is most likely not a reasonable purchase for you.

• Spending more than you earn
  Credit has made it too easy for many people to live beyond their means. Too many people routinely spend more than they earn. If this describes you, it is time to stop and take a hard look at what you are doing. Learning to live within your means can be a challenge but as Mr. Dickens said:
  ”Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

• Shopping as a sport
  People who shop recreationally buy things they don’t need and go into debt to pay for them. Ask yourself how often you have gone to the mall just to see what’s there. If you are looking for something to do, rather than shop, why not take up some volunteer work, join a real sporting activity, or find yourself a rewarding (in inexpensive) hobby. Take time to prepare a shopping list before you go shopping – it will save your time and money.

• Failing to budget
  A budget will show you how much money you have to spend each month and what it is designated for. It is much easier to resist an impulse buy if you know the item is not in your budget. A budget will also allow you to save for the important things in your life – and sticking to a budget can be a very rewarding experience in itself.

• Buying on impulse
  Often when you buy on impulse, you are likely to end up with something you don’t need and really don’t even want. If you plan your purchases, especially major ones, you can buy off-season and/or hunt for the best deal.

• Shopping for the high
  People often get a ‘high’ from buying something new, but the euphoria they feel rarely lasts, in fact it is usually gone before the credit card bill comes in. Consider your motivation when you buy anything you hadn’t planned on buying.

• Trying to keep up with the Jones’
  There will always be someone with something bigger or better than what you have. Don’t go into debt in trying to impress people or keep up with them – odds are they are too busy keeping up with the Smith’s to notice what you do anyways.

• Using credit cards like blank checks
  Credit cards and debit cards often make the buying experience seem less real. It is much harder to part with your money when you are handing over cold hard cash. People are able to disconnect from their money, or their lack thereof, when they use a credit card or debit card in place of cold hard cash.

At one time or another, we have all made some or all of the above mistakes. The important thing is that we learn from our mistakes. Creating a secure financial future for ourselves and our families is more important than anything we will ever buy.