The thing about credit too - it can by manipulated to make someone feel like they can afford something when they really can't. If you stretch a car loan out for 8-10 years and only look at $200/month it looks like you can afford it, you don't think "I will be in car debt for the rest of my life." Repeat this a few times because each time it also appears affordable. Now you have no savings and are living paycheck to paycheck and can't get out of the debt cycle. You have some unexpected expense (furnace goes) and suddenly you are in massive financial trouble. This can sneak up on you if you aren't careful.