Be unrealistic about debt-paying ability
It can be easy to pile up debt. Thinking the future of the economy looks bright, a person decides to buy that new car or adds to credit card debt.
"We are well-intentioned people. We think our ship is just around the corner," Cunningham says. "But sometimes we don't turn that corner."
Sherman Hanna, a professor of human sciences at Ohio State University, co-authored a study that found that before the financial crash of 2008, highly educated Americans were the most likely to take on unmanageable levels of debt. College-educated people were more likely than those with a high school education or less to use more than 40 percent of their income to pay down debt.
In part, that's because people with college educations may have felt overly optimistic about their futures and weren't worried about economic problems, Hanna says. But, when you don't consider how things could go wrong, you can quickly run into trouble.
"When times are good, people tend to have fewer emergency savings," Hanna says. "Don't assume the good times will last forever."