Born just before the war

Hadrian

Being retired I hear a lot about those who are massively in debt then I begin to think about when I was a lad and the attitude we all had then to debt. Getting any form of it whether it was from the bank or a shop was hard work, and it was almost admitting you couldn't afford to buy it outright, which for middle/lower classes of people was a sin. The government had strict rules and regs regarding to whom it was given and shops demanded all manner of personal details that today we'd blanch at. As far as a mortgage was concerned, well, one had to see the society boss and plead, yes plead. You gave him all the details of your financial state, your wages,outgoings etc, and then you then waited until the next society session who decided who amongst the applicants was to receive the loan. When the letter came you nearly cried.
The trouble came in the 60's when credit cards arrived. It was hard for some people to realise that it wasn't someone else's money but that they were borrowing it. Why don't schools teach children that living within ones means (as it was called) is something to be aspired to? To emphasize that I reckon 90% of my younger families possessions are either not used or redundant. The cost of them must run into £££thousands. My great nephew has 'trainers' costing nearly £100! Almost identical can be bought for a tenner. I always thought that it was a parents duty to teach their children the 'value of money'. Evidently not. :T

rog2

Hi Hadrian - First of all, let me say that your thread creates an excellent topic for discussion, so please don't criticise me if my own views appear to differ slightly from yours - they really are not, it's just my perspective.
I was born five years after the war, and yes, I was brought up in an environment which was not motivated by the 'must have' attitude that appears to be prevalent in today's society. However, we must remember that those were times of austerity for everybody - the whole of Europe was recovering from the effects of a war, out of which only the financial institutions and arms manufacturing industry were to emerge in profit.
All available finances were being directed towards the rebuilding of Britain, and Europe, and were not being directed towards the 'leisure or fashion' industry.
There was, however, still personal credit available - but it was on a totally different basis to what is on offer today. For example, my father ran a furniture shop and 90% of what was sold was sold on credit - but not on high apr's nor did they try to increase the credit/debt level of their customers. Instead the 'credit agreement' was between the actual customer and the shop - customers were issued 'books' and would, dutifully, turn up every Thursday to make their payments. Of course there were defaulters, too, but these were dealt with on a personal basis (I don't mean sending in the heavies) by a visit by the manager, to the debtor, and usually by extending the payment period. Only in extreme cases were goods repossessed.
As the economy improved, then the financial sector started to look at 'debt' as an untapped resource. They took on the role of financing HP, which was, initially a good thing in that it 'freed up' the retailer's cash and, on the face of it, gave the purchaser more freedom in where he shopped, as he could 'top up' his available credit at any time.
As more and more product choice became available, more people opted for the 'easy option' of credit and the financial institutions were quick to exploit that market, to the extent that creditors could see more profit to be made by allowing debtors to 'borrow' their way out of debt.
As more people became dependent on these 'faceless' financial institutions, the 'personal' side of 'credit' started to become an 'expensive luxury' and, in the pursuit of profit, has largely been withdrawn.
In a world where everything is 'black or white' this would be a logical progression - after all the computer functions on a 'Yes/No' basis, therefore, logically so can the world of credit - unfortunately life is NOT 'black or white' as we all know - it is million, plus, shades of grey - As are the people who operate the financial industry on which we are totally dependent.
It is all too easy for a 'less than scrupulous' institution to 'tweak' the minimum requirements in order to 'sell' more debt, thereby increasing the short-term 'profitability' of that organisation. We are now beginning to see the effects of this 'credit expansion' hitting home - especially on the 'sub-prime' market, where creditors have, until recently, reaped the richest harvest.
I don't say, for one minute, that we, as consumers/debtors, are totally blameless in this, nor that it all has to do with a want-culture. I'm sure that, even back in what many would term 'the Good Old Days' people lusted after the 'luxury possessions of life' and many went into debt in the quest to have the latest MG open-top tourer.
In my opinion the Credit Industry does its best to dictate the life-styles and possessions, of the modern day consumer, yet shows scant regard to the consequences when that consumer is no longer able to fund the habit that the industry has been foremost in creating.

krisskross

I was a 'war baby'.

I can vividly remember the very first new item my husband and I bought in the early '60s. It was a Servis twin tub washing machine, badly needed as we had 2 children using terry nappies. It cost £99 and we had to put down a deposit of £33. That was 2 weeks wages, the £33, so took a lot of saving.We had to pay the balance off at £1 a week. It was a lot harder to get into debt in those days. No bank accounts, wages paid in cash weekly. If we ran out of money on a Wednesday, then we went without until Friday payday. No benefits, just five bob a week family allowance for the second and subsequent children. That five bob is worth £3.62 at todays values.

moonrakermagpie

Hi there,

Yes, you are right in what you say, some of it anyway.

Could I ask, first of all, did you log on to MSE just to criticise and judge or have you some other reason to post on this site.

In my experiance, old age can give you to things (I am not old by the way!!), one, the wisedom of a life time of experiances, and two , self-opinion.

Yes, I believe that one should learn from ones parents and elders. but they did not grow up in todays world. Something I did not realise until it was pointed out to me!!!!

Yes I am aware that my father, lived in a different world to today (born in 1922 and landed in france on d-day +4 finishing the war peace keeping in Aden, - told the war office to shove their medals up there ****, mum applied for them and has kept them as he died 15 years ago)

Yes, In his day, finance (debt) was much harder to get even from your friendly bank manager, I can remember a day on holiday in the mid seventies, when having run short of a small budget of spending money, all of it spent on the family (us kids), my father spent most of the day in the Lloyds bank at Blackpool, (he had a buisness account with them in wiltshire), having to wait to see the bank manager several times whilst they contacted the bank in wiltshire to be able to have a small advance on moneys owed to him.

Although having said that, the bank was always trying to get him to "borrow" the banks money to buy a new works van and tools etc etc, which he declined.

Before that, in the late forties his older sister borrowed the banks money to buy her own home and set up several buisneses in the east end of London.
My Dad told me that much of her profit came from selling goods to the working class (of which she way one), on "tick" and then going to their homes on pay day to collect.

She also had a one armed bandit, (an old pull the handle one) in the back room of her grocers shop, where housewives in the area would come and gamble their last penny (1d) in the hope of winning a shilling (a weeks wages), most of the time they would leave in tears with their groceries on "tick".

Yes, It was much harder then to run up debts like the young do now, but do not kid yourself that there was no debt back then, far from it, private housing or rather private squalor, living from hand to mouth with your children dieing as babies.

Would you like to see your grand children grow up as it was then.

By the way I do not have any debts apart from my morgage and I although I do not earn a huge wage, (not bad though), I have put enough away to be able to help our kids out when they really need it, usually a loan which they pay back when they can.

Now!!! what you do not know about the real world of today, right from school age the reallity is that the young are bombarded with pressure to have the latest fashion and consumer items such as mobile phones and I-pods etc etc and suffer peer pressure and bullying if they do not conform.

On the other hand, they are again bombarded with offers of credit cards and store cards every time they go shopping, right from school age ( i mean even before they are 18 the pressure is there, all the time)

It takes a very strong willed person to resist the pressures of very persistant salespeople and to say NO!!!!

So the young are almost forced into takeing out credit and then left to sort it out on their own, not very good is it!!!!!!!

Even then, when thy get into trouble, and go to the bank to sort out their overdraft, (that the bank offered in the first place), the bankers (I have another name for them in this example) then offer to solve all their problems in one go.

"Why don't we "give" you this loan to pay off all of your debts so you only have one" (sounds great so far does'nt it), then "why don't you have this insurance with it so we make even more money out of it", Most of the time they do not point out that you are paying the extra amount.(that is illigal by the way)(banks know an aweful lot about illigal don't you know!!!!)

Then, "what we can do whilst we're at it, is, why don't you top up the loan and have a nice holiday or a new kitchen etc etc.

What that does is clear all of the credit cards to £zero and the bank account to £zero so that the person can just go off and run up more debts, then round and round it goes until the wheel really comes off!!!

The thing is, at the end of the day it is not all the "debters" fault, their parents don't or more to the point "can't" stop them and the banks and stores actually "WANT" them to get into debt, they make much more money that way.

I have no debts and did in fact try to "TEACH" my children the value of money, but all of them have had or have got debts. They would not be able to get the money so easily if the credit companies and banks did not acually want them to have it.

So it is not really all their fault!!!!

I personally think that these banks and credit card companies should be well and truly stung, for 100's of billions by bankruptcy's etc, then maybe they would be a little more careful about lending it out in the first place

Try to avoid judgeing before you know that facts:p

Cheers

Steve

GettingThingsDone

How about this as a counter argument...

Somehow all those pensions and benefits of all you older people have to be paid off the back off todays workers. If older people had saved more and not been on strike all the time, maybe we wouldn't have to work so darn hard today. And working so hard these days can include selling unsuitable financial products to others.

Your thoughts?

gtd

ZTD

Hadrian wrote: »

Being retired I hear a lot about those who are massively in debt then I begin to think about when I was a lad and the attitude we all had then to debt. Getting any form of it whether it was from the bank or a shop was hard work, and it was almost admitting you couldn't afford to buy it outright, which for middle/lower classes of people was a sin. The government had strict rules and regs regarding to whom it was given and shops demanded all manner of personal details that today we'd blanch at. As far as a mortgage was concerned, well, one had to see the society boss and plead, yes plead. You gave him all the details of your financial state, your wages,outgoings etc, and then you then waited until the next society session who decided who amongst the applicants was to receive the loan. When the letter came you nearly cried.

The start of this attitude can be traced to Thursday the 24th of October, 1929. The attitude was not one brought about by any thoughts of sinfulness, but of experience. Those in a great deal of debt ended up in a great deal of trouble. It's amazing what an empty belly can do to focus thoughts.

There was *no* government legislation on how banks lent. Banks that had lent injudiciously in the 20's (the 20's roared for a reason) went out of business. The ones that survived were scarred institutions. Every loan was not just a means to slice off a bit of commission as it is now, but was a liability and needed to be carefully controlled. As J P Morgan said - character is the most important attribute as to whether a loan will be repaid - hence the questioning.

Hadrian wrote: »

The trouble came in the 60's when credit cards arrived.

Nope - the trouble started in the 60's with the Vietnam war and Johnson's "Guns and Butter" policies. In short: Inflation. Those that hate debt and have savings are reamed by inflation. People then, over time, learn to embrace debt and hate savings, and thrive in an inflationary environment. They then get reamed by deflation. They then learn, over time, to love savings and hate debt, just to be reamed by inflation again.

Provided you keep these cycles to about the length of a person's lifetime, since people don't learn from history - only personal experience - you can repeat the cycle ad-infinitum.

Hadrian wrote: »

It was hard for some people to realise that it wasn't someone else's money but that they were borrowing it. Why don't schools teach children that living within ones means (as it was called) is something to be aspired to?

Because in an inflationary environment it is not the right things to do. Imagine if you'd scrimped and saved and got enough to buy a house out-right. It would buy a small fraction of a banana. Not a good move.

On the other hand, if you'd borrowed enough money for 15 houses, you could then pay all your debt off - assuming you could afford a banana. You own 15 houses - you worked enough to earn a banana. A rather better move.

Hadrian wrote: »

To emphasize that I reckon 90% of my younger families possessions are either not used or redundant. The cost of them must run into £££thousands. My great nephew has 'trainers' costing nearly £100! Almost identical can be bought for a tenner. I always thought that it was a parents duty to teach their children the 'value of money'. Evidently not. :T

What value does money have though? Only in the stuff it buys. It's not the same money you had as a kid.

krisskross

GettingThingsDone wrote: »

How about this as a counter argument...

Somehow all those pensions and benefits of all you older people have to be paid off the back off todays workers. If older people had saved more and not been on strike all the time, maybe we wouldn't have to work so darn hard today. And working so hard these days can include selling unsuitable financial products to others.

Your thoughts?

gtd

Paying the pensions of us older ones is as it always has been. The workers now are 'paying' the pensions of those of us who paid for the previous generations pensions while we were working. Personally i would have preferred it if we had all had our own government 'pot'. You could only have out what you put in.

Never been on strike in my life, not had a penny in benefits apart from family allowance. Have an occupational pension that ensures I help to keep the tax coffers going. Do you really think I survive off the backs of today's workers? My state pension, in actual cash terms, once I have fulfilled my tax liability is approx. £80 a month. Surely I am not begrudged this after nearly 40 years working?

ZTD

krisskross wrote: »

Personally i would have preferred it if we had all had our own government 'pot'. You could only have out what you put in.

The goverment are not the best ones to run that. They will rob you blind for votes.

krisskross wrote: »

Do you really think I survive off the backs of today's workers?

Of course. Everyone who receives income without working does. Workers trade their time between each other via the medium of money - people who don't work - don't have time to trade. The whys and wherefores of that are a different matter - but the truth is "yes".

krisskross wrote: »

My state pension, in actual cash terms, once I have fulfilled my tax liability is approx. £80 a month. Surely I am not begrudged this after nearly 40 years working?

Don't expect it to last forever. Pensions are a pyramid scheme, and hence will collapse. Gordon Brown's infamous "tax grab" has merely brought that day forward.

hellies

I don't usually like to get involed in such discussions but m afraid that today I have to! I recently had a conversation with my grandmother (who is now 85) and she told me about the poor quality of life her and my grandad had when raising children. Ok so they didn't have debt, but they also had to scrimp and save on everything they did, including heating their house and food shopping, and my grandad apparently earned a better than average wage! children died because homes were not heated properly, people went hungry and life revolved around 'keeping house'. She is always amazed at how much quality time (outings, holidays etc) her grandchildren get to spend with their children and no, i dont have lots of debt and i work full time. I know what life I would rather lead.

ZTD

hellies wrote: »

She is always amazed at how much quality time (outings, holidays etc) her grandchildren get to spend with their children and no, i dont have lots of debt and i work full time. I know what life I would rather lead.

But you do have debt...

At the end of 2006 general government debt was £571.8 billion,

This will be paid by the workers, of whom there are 30 million, that's a liability of £19,000 each...

rog2

hellies wrote: »

I don't usually like to get involed in such discussions but m afraid that today I have to! I recently had a conversation with my grandmother (who is now 85) and she told me about the poor quality of life her and my grandad had when raising children. Ok so they didn't have debt, but they also had to scrimp and save on everything they did, including heating their house and food shopping, and my grandad apparently earned a better than average wage! children died because homes were not heated properly, people went hungry and life revolved around 'keeping house'. She is always amazed at how much quality time (outings, holidays etc) her grandchildren get to spend with their children and no, i dont have lots of debt and i work full time. I know what life I would rather lead.

I don't think that ANYONE can dispute the fact that there HAS been a marked increase in the QUALITY of life, hellies. Your grandparents had it rough, without a doubt, and they are of a similar age to my parents, so I can sympathise with them and agree with you.
However, whilst we all welcome the increase in our standard of living, and trust it continues for future generations, I see the fundamental point of the argument as being aimed at credit institutions, who push people's spending to limits that are so obviously above their limits, and then blame the debtors when they can not afford to pay these debts back.
We don't NEED to change our cars every 2-3 years, yet we are encouraged to, often with the enticement of 'interest-free' debt.
We don't NEED 32" LCD TV's when our existing TV works perfectly well, yet we are bombarded with adverts telling us that we 'must have' these things.
We don't NEED to buy new clothes every month, or go to the Gym, when a daily walk would keep us just as fit.
If we were not so obsessed (and I am, or have been, just as obsessed with these 'status symbols' as anyone) our standard of living would still be better than that of your grandparents, or my parents, and perhaps, as a nation, we wouldn't be facing the debt crisis that we now face.