The Consequences of Poor Financial Management
Self discipline helps you in managing your personal finances and staying within budget. This can be very hard when you see friends spending a lot of money. Debt leads to many problems such as: losing your house, being sued or bankrupt.
The three main consequences of poor financial management are:
-Financial
-Legal
-Social
What is a Financial Consequence?
Financial consequences are when:
- You can't pay for the good and it has to be repossessed. You may have to pay what it costs for the lender to repossess it.
- Credit cards are what usually puts people into debt. If you are young this can affect your financial independence later in life.
Legal Consequences
Legal consequences
- Any money you owe is a debt
- A debtor is the person who owes money
- A creditor it the person who is owed money
As a debtor you have an obligation to the creditor
If you fail to do so the creditor will take legal actions against you to recover the money owed.
Social Consequences:
The financial pressures you may experience might have a number of social consequences...
The pressures of debt may cause stress at home and work.
As the debt keeps piling up, you might start feeling more and more overwhelmed. This will effect your well being.
Pressures of debt can cause
- Domestic violence
- Physical and emotional illness
- Family breakdown
- Even suicide
Social Consequences