Financial Debt

Introduction

Financial debts are usually taken on to finance a purchase that you are unable to afford with the cash you have available. Typically, these debts are incurred through the use of credit cards, loans or hire purchase. Some people feel uncomfortable being in debt and only have peace of mind when the debt is repaid. In many cases, this is due to the debt being secured on your property, this being at risk until the debt is repaid.

To minimise the image of debt on your quality of life and for easy handling of your financial debts, you need to plan your finances accordingly. First and foremost it important to keep calm no matter what situation you may find yourself into. Panicking can worsen your predicament. It is better to avoid purchasing goods on credit cards. Try to buy things with cash and if you can't afford it immediately, it is better to save some money to buy it rather than take small loans from friends or relatives. Moreover, purchases made on credit cards will only add to your financial debts. It is better to carry less money while shopping as the more you carry, the more you spend (Gita, 12-18).

Discussion

Newly developed long historical time series on public debt, along with modern data on external debts, allow a deeper analysis of the cycles underlying serial debt and banking crises. The evidence confirms a strong link between banking crises and sovereign default across the economic history of great many countries, advanced and emerging alike. The focus of the analysis is on three related hypotheses tested with both “world” aggregate levels and on an individual country basis. First, private debt surges are a recurring antecedent to banking crises; governments quite contribute to this stage of the borrowing boom. Second, banking crises (both ...