The problem is not universal and many individuals have managed their finances well, but collectively we have not behaved well.
I make this as a moral judgement, morality being the study of the ways of the people (mores). Living within your means means being self-sufficient. We do not want our children to have to pay our bills any more than we want to pay our parents bills.
I pay a lot of bills for my family and I am intent that come their reaching majority, my and other children will be self-sufficient, or – if in debt – have proper debt management plans.
It is difficult for insolvent parents to preach solvency to their offspring. Since the majority of parents are part of the debt problem , rather than solution, there is a consensus that financial education, while it may begin at home, needs to be reinforced in schools colleges and the workplace.
And it’s not happening.
The bank of Mum and Dad/ credit cards ,student loans and even loan sharks are the defaults for our kids.
Budgeting, economising , saving and working seem to be low on the agenda.
Which is why I am keen when I see people like my friend Viv Friedgut show some leadership. Vivi displays good habits, teaches good habits and she does her work in schools and colleges.
I’m keen to get her work with companies and talking with her, I can see where she can fit in.
Here is an insight that struck me this morning.
I am thinking this assumption’s wrong. University does not necessarily prepare people for good adult habits. In fact it teaches a whole load of things that need to be unlearned – not least the idea that debt is normal, available and its repayment at the creditors discretion. Those who do not go to University are increasingly a minority but they seem to have by-passed these negative habits and , in my limited experience, considerably more grounded about money than their graduate colleagues.
Every year my firm takes on graduate trainees as do the vast majority of professional practices and other organisations for whom academic qualifications are important.
I suspect that the graduate recruitment process makes the same (wrongful) assumption that I have made, that these graduates are ready for work. I don’t think they are. I think that many are financially incompetent and so dysfunctional that they typically underperform because of money worries.
I don’t, as an employer, like the idea of paying for my graduates to get a grounding in finance (and to be fair actuarial students are a little more sensible than the norm). Nevertheless, I reckon it may be better for us to spend some money on educating them in some financial life skills as part of their induction into work, than assume that they will sort things out for themselves.
I’d rather that than see them swap their wages for Saturday morning hangovers and accumulate debt rather than save for their future.
Bankrupt graduates are a waste of time.
- Three Habits That Are Killing Your Credit (lexingtonlaw.com)
- Debt Management Plans and IVAs – and Fee or Free Debt Advice (cleardebt.co.uk)
- How to Avoid Bankruptcy (answers.com)
- Keeping kids solvent (henrytapper.com)
- Are your junior staff’s finances any business of yours? (henrytapper.com)
- The Key to Debt Management (ally.com)
- Debt Management Basics (ally.com)
- Signs You Are A Compulsive Shopper (gadebtconsolidation.com)