Backlash?

ZTD

There is good debt and bad debt: Good debt is credit that is spent on production - however you wish to define production - and that produces more than it costs in interest.

Bad debt is all other forms of debt. Especially debt spent on consumption.

But even good debt is not without its risks.

bathgatebuyer

I think too many people see shopping and consumerism as a measure of their success in life and as a person. We all want to measure ourself against our peers and what they want, we want. I know more than one person who has found themselves deeply in debt to 'keep up with the Jones', in particular I can think of one couple who ended up with £30K of debt because the Mrs always wanted things and her partner felt as if he had to give her them because he saw everyone else doing it. This led to new kitchen, new bathroom, new caravan, all the while keeping their debt problems from her. He didn't want them to be the only couple in the street without the X, Y or Z everyone else had. The impact is, everyone else felt that they 'had to have' just to fit in.

My own debts were in a kind of similar vein, although it was excacerbated by spells in unpredictable employment which led to me being out of work for spells and unable to pay essential bills such as the mortgage! But, having come from a 'poor' background, having nice things really was a measure of success to me. Who isn't jealous when they see someone they went to Uni with driving around in a £20K BMW? Of course, I wanted to be like that. However, the one thing that I have learned, is that my life is mine and mine alone. Everything I buy is my responsibility and mine alone, and the debts I have are mine and mine alone. If such-and-such wants to have a £20K car on a secured loan that lasts 7 years, then good luck to them! I'm not going to even try and keep up as being at my lowest point with £34K worth of debt and no job and the prospect of losing the home I have been in for 7 years, taught me that often behind every big car, exepnsive watch, flashy suits, can be nothing but misery worrying about how to pay next months credit card bill. Frankly, Mr and Mrs Jones can make their purchases, it's a chase I'm not willing to take up.

It does astonish me that so many people get caught in this trap. Everytime an SOA is put on this board, inevitably there's £50 a month on Sky, or £50 a month on a haircut. My grandparents would have some sort of fit if they thought that people were spending that amount of money on TV and haircuts! Somewhere along the line, our generation (I'm 31) and the one before stopped listening to what our parents taught us about money and thought we could have it all. We can't. We can only have what we can afford and it's a lesson that I, and almost everyone else on this board, have had to learn the hard way.

dudleyboy

January20 wrote: »

I agree with all said so far, especially, Pobby, regarding the media bombarding us with images of the rich and famous, but also making us believe we live in a very dangerous world, where there is a rapist/ serial killer at every street corner. All this makes us feel insecure.

In all fairness, there probably is a rapist / killer / stranger / robber / mugger / violent-lout / nutcase living in most neighbourhoods. The news don't make it up. Their victims are/were real people and this stuff really did happen to them. It is a dangerous world and one that is populated with people who are more interested in having the latest iPod, the value of their (over-inflated) property, the state of Britney Spears' mental health and who's won the latest TV talent show than they are in solving our environmental problems or raising their children to be reasonable and responsible members of our society. It's our collective responsibility to protect ourselves, our families, our neighbours, friends and even people that we don't know. If everyone did this we'd all be a lot safer... but instead it's just easier to turn a blind eye and blame the media. Shooting the messenger, if you will.

Similarly, just because there's magazines out there like "Heat" and just because the TV is preoccupied with shows on gadgets, fashion, cosmetics, luxury items, holidays, travelling, flash cars, home improvement, etc, it's entirely up to us whether we buy into it all. It's the power of advertising and no-one is forcing people to sign credit agreements or to swipe their cards to join in.

There are many people on this DFW board who are in debt because of investing in themselves and their future (student loans and loss of short-term income), because they're on a low income and struggling to make ends meet since the cost of living in this country/nation is incredibly high (energy, food, fuel, etc), because their business has unfortunately failed, or because of a series of unfortunate or tragic events (ill health and/or death and the problems that arise from them). Not everyone here can be tarred with the same brush and I think it's unfair to assume that everyone who is in debt is there of their own making (not that I'm saying that anyone here has said that ).

But there are also people who are in debt because of their own stupid, greedy, naive and/or narcissistic behaviour and who've squandered money that isn't theirs on the latest "must have" because they simply don't have the sense or integrity to make informed decisions for themselves. It's their fault they're in debt and while the media may bombard them with cynical advertising that's expertly designed to make them part with their (and the bank's) cash, it's up to the individual whether they do.

January20 wrote: »

mo1, you are right about the make do and mend, it would be so much better for us and the planet, but often the "mend" attitude works out more expensive ie it's often more expensive to get your toaster repaired than buying a new one! mad!

That's true... but then why do any of us even need a toaster? I've got a cooker and it grills bread pretty well all by itself. I know it was just an example, but it's also an example of the wasteful way of life we've all accepted as being normal.

I think it's about time that everyone turned their back on all this commercialism and consumerism and stopped aspiring to be Jerry and Margot when they'd be much happier, healthier and wealthier living like Tom and Barbara.

What's more, many wealthy individuals and celebrities are only rich because they have the money we've spent on them and their stuff. If we stop buying, and keep the money for ourselves, then we increase our wealth and decrease theirs. Narrow this financial gap enough and we can all live a celebrity lifestyle!

Fortunately this fantastic website is changing peoples attitudes and perceptions and making these comments on this site seems like preaching to the converted but, still, if everyone here was to instil these values into their own and uphold them themselves, then maybe we would all be living in a much happier, healthier, safer, more tolerant and less materialistic world.

Will there be a backlash? I hope so.

In_Search_Of_Me

umm its a complex thing people get into debt for various reasons. There is, IMO, a huge difference between my attitude to money & someone of my mothers generation. If they didnt have the money they didnt have something wherin I would just chuck it on my credit card, thinking nothing of it & bought into the "things" made me happy but they didnt! Plus most of them have now been sold on ebay at a fraction of the cost!
The credit crunch will have a huge impact on peope I think & I'm glad that I had my LBM a while ago or would be scared witless at the moment & I have huge empathy for people in that place.
Its easy to judge those of us who have been foolish but TBH I know I've been incredibly stupid and in that respect youre not telling me something I have learned the hard way but the valuable lessons are often the ones that hurt most.
Yes being in debt does bring misery - in my case partly due to the fact that not only wil my stupidity mean that I have 7 years of grind paying it off, I know I have been stupid but most of all because it affects people I love and that hurts most of all.
So will things change? Yes os course - they have to because alot of us foolishly went after the dream but now now, to our cost, know that that dream it a load of rubbish! Does it help to know that? In a way, yes. Despite being in debt & really struggling to pay it off I have learned invaluable lessons along the way. I choose to learn from my mistakes, forgive myself and help others out of debt where I can.
Do I regret it? In some ways yes but in others no. I am happier than I ever was, know who my friends are and have learned the value of living a far simpler life and spending time with people I love!

rog2

dudleyboy wrote: »

It's the power of advertising and no-one is forcing people to sign credit agreements or to swipe their cards to join in.

Whilst, certainly, no-one actually may hold a gun to people's heads in order to force them into signing credit agreements, the 'Power of Advertising' is, most definitely aimed at creating the type of 'Peer Pressure' that makes a person feel inferior, even inadequate, if they do not do so.
Of course the final decision rests with the individual, but not everybody is strong minded, or even rational, enough to make that decision based purely on financial merit.

ZTD

rog2 wrote: »

Whilst, certainly, no-one actually may hold a gun to people's heads in order to force them into signing credit agreements, the 'Power of Advertising' is, most definitely aimed at creating the type of 'Peer Pressure' that makes a person feel inferior, even inadequate, if they do not do so.
Of course the final decision rests with the individual, but not everybody is strong minded, or even rational, enough to make that decision based purely on financial merit.

Most of the time it's nothing to do with rationality - but with knowledge. How many people out there know what compound interest is? (for example)

Pobby

Hi rog2.Thanks for the welcome and compliment.Doing OK here,business is slow but I think that will be the same for many.Hope you are well!

I need to make it very clear that I am NOT throwing stones at people in debt .I have said many times that for some(illness,loss of job and so on) it is indeed a sad state of affairs.

I have for many years,sparked I think by rapidly rising house prices,been very interested in how people have had a new(and in my opinion distorted) relationship with money.Even Mrs.Pobby humors me now and even bought me another book on the subject for my birthday:).

I have also written a couple of articles comparing gambling to certain non gamblers spending habits and have been working on a theory that their are some strong links.these are based on the relationship to money.However,maybe that might be another thread for the rantings of Chairman Pobby!

Years ago my wife had a well paid but mind numbing job.She might look forward to lunch time and go and buy a new top or whatever.She said that was compensation for the work she was doing.There ya go,this was over 30 years ago.The difference was that this would come from cash in her purse!

There is,to my mind,an element of spending which(although it doesn`t work) is attempting to fill some sort of gap.

What will be interesting is to see the attitudes of the young who are now are working for a wage.

ZTD

dudleyboy wrote: »

That's true... but then why do any of us even need a toaster? I've got a cooker and it grills bread pretty well all by itself. I know it was just an example, but it's also an example of the wasteful way of life we've all accepted as being normal.

A toaster is more economical than a cooker - it consumes less power and is quicker - remember to assign a value to your time too.

dudleyboy wrote: »

Will there be a backlash? I hope so.

It's wrong to call it a backlash. This is just a cycle of history. There was a time - within living memory - when money was easy, life was good, and everything was unsustainable. That was the 1920's.

Then times changed. We too are on the cusp of change. For exactly the same reasons. Our arrogance makes us believe that people in the past were stupid, and we are clever, and we won't let history "get us" this time.

"Things are different this time..." is a most popular refrain. Strangely enough, this time it's true. But not in a good way.

dudleyboy

rog2 wrote: »

Whilst, certainly, no-one actually may hold a gun to people's heads in order to force them into signing credit agreements, the 'Power of Advertising' is, most definitely aimed at creating the type of 'Peer Pressure' that makes a person feel inferior, even inadequate, if they do not do so.
Of course the final decision rests with the individual, but not everybody is strong minded, or even rational, enough to make that decision based purely on financial merit.

I definitely agree, rog, about the "peer pressure" aspect and being made to feel inferior and inadequate... I've felt that way for the past 6 years being a DFW (with still 2 years to go - oh joy!) ... and I think it's very difficult, as bathgatebuyer says, for people of my generation (I'm 30) because the expectation of what we must have, must do, and how our success is measured, is incredibly high.

We're told that we should travel the world while we're still young, while also getting a foot on the (unobtainable - for now) property ladder. We're told to live life to the full, while also told to study hard, train hard and work hard to establish ourselves in a good job/career. It's a world of contradictions and, with so much credit available, it's become almost possible to do it all within a few short years.

I agree that it is very tempting and the pressure is great.

In_Search_Of_Me

I now find it hard to believe that I signed loans without even looking at the long term implications but I did and I think thats been part of the "dream" or spin - believing that the loan would be the solution I was able to kid myself that it was when actually the simple solution was to start paying t back & stop spending...seems so simple but like millions of others just blindly went with to & learned the meaning of "front loaded interest" & compound interest the hard way!! Nuts!