Ok. I am a bankruptcy attorney in the U.S. and people generally end up in my office for one of four reasons.
1. Medical debt. That is a whole kettle of awful beyond my point here.
2. Divorce. Significant upheaval of everything tosses a bomb into finances.
3. Reduced income without time to plan. This is generally people who abruptly are unable to work, spouse dies, job loss, etc.
Often related to #3, but not always, is
4. Snowball debt. This is debt that creeps up $500-$1000 at a time. Car breaks down, put it on the card. Have to pay the card this month, need a payday loan for rent. Etc. etc.
The kind of debt I almost never see? Charged $40,000 for extravagances. No, it was $100, $500, $1000 at a time trying to stay alive. Buying food. Rent. A bad month, or setback (or tragedy) snowballs. And the crazy thing is, if you track it back, it is usual the result of being a few $100 short.
Part of the bankruptcy paperwork is a work up of income to expenses. And sometimes I stare at it, because it is literally impossible. They are doing everything they can, their expenses are whittled down to achingly lean, and the math doesn’t work.
A couple hundred dollars a month would change everything. They might not have that debt snowball at all. They could drop the second job and finish up their degree, or get that side business selling their art up and running, or go home and make dinner and read books to their kids, or live without stress pushing them toward a medical crisis. Or go home and pet their dog and rest.
I can’t help but think about the net societal benefit of a few hundred dollars a month. It would be more than the expense of a few hundred dollars a month.
Oh. And people would be less miserable.