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No debt for me

April 23rd, 2008 at 05:44 am

I have been reading James Scurlock's book Maxed Out. I haven't seen the documentary, but he talks in detail about some of the cases in the book. Terrifying how easily some people fell into the debt trap. Having formerly been a volunteer tutor with an adult literacy group, I wouldn't be surprised if some of those folks can barely read. I blame it all on the education system for not teaching financial literacy. I can remember going off to university with my brand new checkbook and not knowing how to write a check for my fees - the woman at the registry desk had to tell me how!

I guess I am very fortunate I was reared by Depression Era family members who really dinned it into me debt is not a good thing. The only acceptable kind was a mortgage, and that was paid off as quickly as poss so you had a secure roof over your head. I only ever had one store card. When I bought my own house I had all sorts of little expenses, needing to buy tools, put up shelves etc, so I applied for a card with Mitre 10, the DIY supplies store. Wow did I ever get a shock when I ran up $500 worth of stuff in a couple months! Then I saw how much the fees and interest rate were on the statement. I sat down with a calculator and figured it would take me 5 years to pay it off and twice the amount charged if I kept making the minimum payment, so I paid it off as fast as I could and cancelled it. I am very fortunate I had an education and knew enough to go to the local library and start checking out books on personal finance when I realised I had a problem.

I wonder if people would be more careful if we legally obliged credit cards to be referred to as "debt cards"? There's a force - at least to me - about the word debt that doesn't seem to exist with available credit or home equity loan. Or maybe, as I did when I first tried my store card, they just think it's only $25 a month and don't focus on anything else. Of course I was a young knowitall new grad back in those days. Nowadays I see students putting beer and pizza on the student loan, never noticing how it adds up.

Posted in Uncategorized | 5 Comments »

5 Responses to “No debt for me”

  1. klbb90 Says:
    April 23rd, 2008 at 10:52 am 1208947951
    1208947951

    Years ago my husband and I fell into hard times. The ecomony was in a recession, and we have acquired debt. I was even afraid we would have to try to sell the house to stave off foreclosure. I was afraid we would lose everything we had worked hard to acquire. I went on a cost cutting/conserving binge. I talked to older people, not to complain but ask advice on how they cut costs. I went to the library and checked out everything I could find. Others I knew in the same shape just complained and although they would say how great it was that I went to the library and did the things I did, they just borrowed from parents. I didn't have that option. I am amazed at even the educated (teachers) people I work with that handle money so poorly and will not research ways to cut money. I believe that financial literacy should be taught in high school as required study like english social studies and math. Financial independence should be the main goal of the class.

  2. njdebbie Says:
    April 23rd, 2008 at 12:28 pm 1208953686
    1208953686

    AMEN!

  3. sagegirl Says:
    April 23rd, 2008 at 04:22 pm 1208967740
    1208967740

    I think a financial literacy class should be taught in high school and required to graduate. I could have learned a thing or two myself.
    BTW-Maxed Out is a good documentary. You can view it online at http://bestdocumentaries.blogspot.com/2007/10/maxed-out-full-documentary.html

  4. Petunia Says:
    April 23rd, 2008 at 04:24 pm 1208967889
    1208967889

    When my sister went to college one of the things she learned was "a credit card can get you in to trouble". Your approach to it really depends, I think, on whether you own your own problems or blame them on someone else.

  5. Diolla Says:
    April 24th, 2008 at 03:52 am 1209009177
    1209009177

    My son took a personal finance class in High School-It taught him how to get a car loan, check his credit score, get a mortgage...

    I showed him how to write a check, how to pay bills online, how to use his debit card, how to balance his checkbook, how to get a job, how to budget, how to open an online savings account...

    Good thing he didn't have to rely on school to teach him.

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