There’s a really great article on how to get a better credit score that got me wondering why too many of my peers are so bad with money and others aren’t. There seem to be a lot of factors to this, but here’s who I blame:
- Education System. I think they’re better now, but when I was in school we NEVER had lessons or classes on personal finance. My generation got out of high school and were immediately lured by shiny plastic cards and the free T-shirt we got by signing up.
- Shiny Plastic Card Companies. Their marketing was totally geared towards enticing people to buy what they couldn’t afford with cards they shouldn’t have been approved to have.
- Stupid Parents. Parents in my generation (except for mine because they were of the “If I didn’t have it as a kid in in the Great Depression, you don’t need it” mentality) are so stupid! They want to give their kids everything because they worked so hard to get it. So their kids (my peers) are spoiled, reckless, presumptuous and impatient.
- Banks. See #2. Same reasoning. They loaned out way too much to people who thought that’s what they could afford because a big, bad bank told them so. Such a travesty.
Anyway, but If you can’t buy it with cash, you shouldn’t buy it at all. Credit cards are fantastic and can offer a lot of perks. But only if you can pay off your balances in full every month. I never put anything on a card that I couldn’t pay for in cash. That way, at the end of every month I’m not scrambling to cover it or revolving huge balances and racking up debt with high interest rates.
I think we all need to think hard about how we’re going to teach our kids to respect money and respect credit. No 18 year old deserves a credit card just because they’re 18. They need to have shown they can handle money responsibly in the past. Financial responsibility can start as early as preschool.
Maybe it’s my obsession with work, but I think we need to raise our children that money is earned, not given, with hard work. Giving kids an allowance for doing chores is a great way to teach them to pair money with work. I think that’s why I love money so much – and why I love work so much. Both have such big rewards.