Debt sucks

Working in banking, part of my job is to extend various credit products (i.e. loans, lines of credit, and credit cards) to my customers. I’m not against debt, but the problem I’m seeing with most people who come into my office for credit is that it’s for all the wrong reasons. These days, people have forgotten (or never learned) what it means to save for something whether it’s big or small, instead they just get a loan. The best part is that they come in fully expecting to get the loan; without a credit history, with a terrible credit history, with little, to no assets, or simply based on the fact that they’ve been a customer since they were a kid.

There’s a scary sense of entitlement by many people these days. The prevailing attitude is that “I work hard, so I deserve a .” A lot of people work hard, but not a lot of people can indulge in endless luxuries. Of course, many people look at these luxuries as necessities, and will do anything to fund their needs so they can be happy right now, without a thought of what they’re really spending.

Hello?? Can you lookup depreciating asset?

I find it especially worrisome when 19-25 year olds walk into my office expecting to get some money to buy their first car, new furniture for their place, or (increasingly) to consolidate debt they’ve already accumulated! I blame their parents for not teaching them the value of a dollar and how to save money. And I’d bet money that the majority of these debt consolidating kids, who don’t qualify for a consolidation loan because their income to debt ratios are through the roof, can’t ask their parents to co-sign on the loan either because their credit is just as crappy!

The credit crisis going down in the US is proof in the pudding that people just don’t know how to manage their debt load. After years of spending without the cash to back things up, the American economy is only starting it’s long overdue crumble. According to MSN Money: the average Yankee household has $8000 in debt; 43% of Americans spend more in a year than they earn; and personal bankruptcies have doubled in the last 10 years. And as for us Canadians, don’t think debt is an American-only disease. We’re quickly screwing ourselves just like our neighbours to the south.

Hold the phone Warren Buffet! Do people think their spending doesn’t have to be paid back some day? That they can simply live life making minimum monthly payments and feel good about themselves? A lot of the people that enter my office for credit don’t care about the cost of borrowing because all they look at is the monthly payment and whether they can swing it each payday. No wonder it’s impossible for them to start a savings account — they’re too busy living cheque to cheque.

The point of my rant is that you; the instant gratification needing, working for the weekend, can’t see the problem with cashing my cheque at Money Mart, driving a $30,000 car while wearing designer jeans but don”t have two dimes to rub together, racking up $250 a month cell phone bills; restaurant frequenting, happy go lucky, living for today, cuz I might die tomorrow, soon to be bankrupt dummy — LEARN TO LIVE WITHIN YOUR MEANS or you’ll have nothing to show for, besides a mountain of debt and a life sentence of working to payoff what you owe.