Wednesday, 23 January 2008

Can you credit it?

Everyone's panicking about falling share prices and the fate of the economy this week.

I don't pretend to understand economics. I really can't see how something as ephemeral as the (lack of) 'confidence' of bods on the stockmarket floor can have an impact on the price of veg at Tescos. But I do understand that the greed of US and UK financial companies in dishing out massive amounts of credit and the gullibility, avarice and consumerism of borrowers, has landed us up in a big mess.

You don't need to be a clairvoyant to have seen this coming. Where I live, I'm surrounded by low-income families driving around in BMWs with personalised number plates, sporting 'designer' clothes, trolling off on holidays to Florida, building hot tubs in their gardens and out purchasing the latest HD tv as if it's a life necessity.

It's almost endemic. Last month a friend of mine told me of a lady who comes to clean for her. This lady has 4 children, she cleans for a few hours a week and has a husband on disability benefit. She told my friend how she was having to 'cut back' on Christmas presents for the kids this year and was only spending £100 per child. That's cutting back??

I'm pretty sure that our household income is higher than hers, but there's no way I'd think of spending £100 on each child. I can only think she used the credit card.

I know it sounds a little precious and pompous, but this level of materialism really bothers me. Don't these people realise that they have to pay the money back eventually? Don't they realise that showering their kids with expensive items at Christmas doesn't make them happier, better, more rounded children, but just future victims of shallow consumerism? It's just all wrong.

It's not just low-income families who get in this mess either. On Radio 4 I heard an ex-journalist for the Times describing how his credit borrowing spiralled to such an extent that he ended up without his wife and kids, without his home, out on the streets and without a job.

The sad truth of all this though is that it's not only the borrowers who end up suffering in the long run. Now we are all paying for it.

But in a peverse way, I welcome the 'credit squeeze'. It's about time someone pointed out that you shouldn't buy what you can't afford. Simple as that. (um..except for a house of course!).


Tom Foolery (TF) said...

Just found your blog via link on Crystal.
Such wise words on your post TF.

Omega Mum said...

The wisest thing I heard was on a programme about the homeless. One woman was talking about her experiences. She said 'You think your life is fine, but all it takes is one thing to go wrong and everything can fall apart.' We rely on the status quo. We assume. We spend. We live for the moment. And then it all goes wrong.

Flowerpot said...

I quite agree, ML. But few people do - hence the problem. We actually dont spend more than we have as neither of us have credit cards, but we're the only people I know who don't!

Annieye said...

Hi I've only just found you blog. I so much agree with what you say. My daughter learnt the hard way about credit when she was at uni. At the same time her then 19 year old boyfriend (now her husband) was having money literally thrown at him. I could see the fall coming but well - you can't interfere can you?

Thank goodness they got into a horrible financial mess before they had children! I was so relieved when they realised that credit cards were evil things and gave them to us to keep for them until they had paid their debts off.

We still have them actually.

We started building a huge 2-storey extension on our house four years ago and decided to fund it ourselves. We knew it would take us years to finish, but didn't want to increase our mortgage or take out a loan. We will probably finish it by the end of this year, but we're fed up to the back teeth of people criticising us. "What, you STILL haven't finished it?" I bet they're whispering behind their hands things like "they bit off more than they could chew," and "they've run out of money."

Sod them - they can think what they like.

Suzy said...

Yeh, money is a funny thing. Of course it doesn't help in the US when you see all these sports icons making millions and millions of dollars for 1 year!

It's almost a competition. I can't imagine it takes that much money to make people happy.

Great post!



Casdok said...

Flowerpot - i dont have a credit card!! And like you i dont know anyone else who hasnt one!

Crystal Jigsaw said...

People don't seem to think anything of going into debt these days. I hear all the time of folk around who are up their eye balls in mortgage debt. I don't have a mortgage personally and owe very little on my credit card but I have been there. I don't want to go back either. What I can't afford, I won't buy. Simple. Discipline and common sense are quite good to have when it comes to materialistics.

When I was buying our new kitchen, I was asked 4 times if I wanted to take out finance. No, no, no and no were my answers. Obviously, finance is a big thing.

Crystal xx

Mid-lifer said...

Well hello tomfoolery, enjoyed your own post too on much the same lines,

Omega mum. I've heard similar stories and find it scary how easy it is to slip into such a state - but I still maintain the staying in credit is a good way to go.

Flowerpot and Casdok - we do have cards, but very very rarely use them (except when stuck in Tescos and the debit card is inexplicably lost but a pile of shopping is all packed up and ready to go.

Suzy - nice to see you back. I KEEP telling my daughter that money really and truly won't make her happy (and then my husband pipes up and adds 'but it helps!').

Annieeye, thanks for stopping by. Good for you with the extension, We keep toying with the idea but balking at cost, time, upheaval etc.

And Crystal - glad you agree. We get almost daily calls asking if we want to consodlidate our debt. I keep telling those pariahs that the only debt we have is the bleedin mortgage.

She's like the wind said...

I agree, I don't live by those rules, but I do agree and once my credit cards are paid off there will be no more! x

Swearing Mother said...

ML you are so right. These days so many people tend to know the price of everything and the value of nothing, to steal a quote.