A debt culture gone awry

[phongn]

Its odd..... My friends here, who are generally quite okay with managing their finances, see no qualms in using their credit cards. Their idea is that as long as they pay the balance every month, its a worthwhile deal because of the credit card points and other discount deals they can cash in on.

I never really ran the math, but I have a gut feeling that the two or three times we go out and any other miscellaneous discount/points they earn doesn't offset the credit card fee.

Many credit cards in the US have no fee and some even are rebate cards. I effectively profit from using my credit cards.

[Darth Wong]

People need to educate themselves when it comes to financial responsibility.

What percentage of people actually reads sales agreements and loan contracts before they sign them?

[Ma Deuce]

What I don't understand is, if people want cleaner, better-tasting water, why not just buy a frickin' Brita filter? They even have models you can attach directly to your tap.

[Darth Servo]

What I don't understand is, if people want cleaner, better-tasting water, why not just buy a frickin' Brita filter? They even have models you can attach directly to your tap.

Because A) you can't show off your trendy water filter at the club, game, etc where you meet your friends. Hell, you can't even take it into the living room and B) installing a filter is too complicated for Joe average.

[The Grim Squeaker]

What I don't understand is, if people want cleaner, better-tasting water, why not just buy a frickin' Brita filter? They even have models you can attach directly to your tap.

Because A) you can't show off your trendy water filter at the club, game, etc where you meet your friends. Hell, you can't even take it into the living room and B) installing a filter is too complicated for Joe average.

And C) Brita filter's can be quite dangerous if they're not cleaned well.

I feel compelled to make an off-topic comment to the note that 5 minutes before my "We're drinking bottled water" post I'd drunk some tap-water (through our Brita filter).
I later spent half an hour in a tizzy due to finding out that the tap water here really is poisonous. (And calmed down when told that it only kills/endangers babies or when drunk in large quantities, fortunately enough).

[Darth Wong]

Oh for fuck's sake, you're totally missing the point. As the NatG article pointed out, the prevalence of bottled water allows people to neglect local water systems, which hurts everyone. So pointing out that your local water system is not properly maintained and is spewing out poisoned water does not refute the point.

[Skylon]

That's exactly my point. It pisses me off to no end that we can't seem to get our shit together and address the fact that young people are mostly illiterate when it comes to finances. Why can't we get this into a school curriculum? Even a class on writing a fucking basic budget would be great, especially since too many adults don't know how to do it.

High School economics courses in the US is a joke (partially because the senior year of high school is seen as a joke by many). Mostly because Social Studies teachers have college backgrounds in history and not economics, but get dragooned into that anyway, unless it is AP level economics. The main concepts are things like supply and demand and crap like that. I think it's dumbed down for the teachers as much for the students.

Still, I remember my Economics teacher in 12th grade did have us make a one year budget for ourselves as a final project assuming we were 22 and out of college (assume you have a job, get a place to live, get a car, live off what you make). That may have been a fluff, not taken-too seriously at the time assignment, but the way things are if I ever got drafted into teaching an economics course I'd probably do a similar project with students.

"Consumer sciences" is apparently what Home Economics is called these days and is taught at the middle school level, but with a title like that you'd think that'd teach you something.

[Redleader34]

Hey guys. I'm a High schooler, about to graduate in around 8 months or so, and what are some basic ways to learn about all these econimic things. What is the best way to go?

I understand the basics like Don't spend what you cannot afford, but are there any more tips?

[Superman]

Hey guys. I'm a High schooler, about to graduate in around 8 months or so, and what are some basic ways to learn about all these econimic things. What is the best way to go?

I understand the basics like Don't spend what you cannot afford, but are there any more tips?

Become interested in managing your money. Set goals.

Go to the library and check out some business books. Start with the basics, like "Personal Finance for Dummies," or anything that catches your interest.

[Darth Wong]

Hey guys. I'm a High schooler, about to graduate in around 8 months or so, and what are some basic ways to learn about all these econimic things. What is the best way to go?

Before you sign a contract, take the time to read it. Salesmen like to pressure you to sign quickly, and you'll feel like you're holding up the process. They will often try to "help" you by conveniently explaining what the contract says, so you don't have to read it yourself. But ignore the pressure. Take the time to read what you're signing, before you sign it. It's amazing how 99% of people will sign something unread because of the social pressure of not wanting to make everyone sit there while they read it. Salesmen know this, and will stare at you while you read it. It will be uncomfortable, but if you sign a contract without reading it, you're just asking to get fucked.

[Adrian Laguna]

The ultimate scam is still bottled water. Even the worst fashion industry excesses can't hold a candle to that. And as a recent National Geographic article pointed out, not only does it produce an enormous amount of waste and consume enormous amounts of money, but it leads people to put less emphasis on municipal water treatment systems when it comes to budget time. That hurts everyone.

It should be noted, however, that this does not apply to third-world countries. There the municipal water has been shit, is shit, and shall continue to be shit. Bottled water can be the difference between refreshing hydration and explosive diarrhoea. Of course, it should also be noted that over there the bottled water is usually sold in 5 gallon bottles, which are more energy and material efficient than the puny bottles popular in developed countries.

[Vympel]

Before you sign a contract, take the time to read it. Salesmen like to pressure you to sign quickly, and you'll feel like you're holding up the process. They will often try to "help" you by conveniently explaining what the contract says, so you don't have to read it yourself. But ignore the pressure. Take the time to read what you're signing, before you sign it. It's amazing how 99% of people will sign something unread because of the social pressure of not wanting to make everyone sit there while they read it. Salesmen know this, and will stare at you while you read it. It will be uncomfortable, but if you sign a contract without reading it, you're just asking to get fucked.

Be a smartass and take it away for your lawyer to explain it to you.

Hey, I need the money.

[mr friendly guy]

Hey guys. I'm a High schooler, about to graduate in around 8 months or so, and what are some basic ways to learn about all these econimic things. What is the best way to go?

I understand the basics like Don't spend what you cannot afford, but are there any more tips?

If you are going to use a credit card, pay it back before the due date. If you don't have the discipline, go for a debit card instead.

Try to borrow for assets which will appreciate. For example a house (you may have to do this even if the property market is going down because you may simply need a place to live) or shares. Don't borrow for that big screen television unless you can afford to pay it back reasonable quickly, like before the due date.

Try looking for an online savings account. They usually have no bank fees and give you a higher rate of interest. This gives you a place to "park" your money until you can invest it.

Try saving a portion of your income each time. Generally use the "pay yourself first" principle. That is you take out x amount of dollars each pay day and save it, and then spend the rest. People tend to spend money more freely if its in a wallet rather than if its out of sight in a bank. Most financial "experts" I have seen recommend between 5-10% of your income each pay day.

Decide DO YOU REALLY WANT SUCH AND SUCH AN ITEM. Are you getting that flashy car for yourself or to impress other people? Its said that we buy things we don't need with money we don't have (credit) to impress people we don't like. If you really want it, then thats fine if you can afford it. Otherwise you most probably better off saving the money.

[brianeyci]

Don't go to college unless you can afford it or you get it on scholarship.

Everybody needs a college degree to get anywhere these days... but there's plenty of colleges nearby that aren't as expensive and don't eat four years of your life and get you working right away.

Four years of your life is pretty serious, and if you're in high school don't feel pressured to take higher education just because everybody else is doing it. You will need more than high school, but it doesn't have to be four years, and you don't have to go 50k in debt for it.

[lance]

Don't go to college unless you can afford it or you get it on scholarship.

Everybody needs a college degree to get anywhere these days... but there's plenty of colleges nearby that aren't as expensive and don't eat four years of your life and get you working right away.

Four years of your life is pretty serious, and if you're in high school don't feel pressured to take higher education just because everybody else is doing it. You will need more than high school, but it doesn't have to be four years, and you don't have to go 50k in debt for it.

Do you mean don't go to a big time university? I'm taking college classes basically to ooze towards some career and I'm easily affording it on a McDonalds wages. Granted I live near the cheapest college in Michigan.

[AdmiralKanos]

If you are going to use a credit card, pay it back before the due date. If you don't have the discipline, go for a debit card instead.

Debit cards don't really help people maintain fiscal responsibility. The kind of person who uses a credit card willy-nilly will do the same thing with a debit card, draining his account on frivolities and then begging his friends and parents for money to pay the rent. And now that almost all banks have "overdraft protection", you can effectively use your debit card as if it's a credit card.

[Shinova]

If you see something really cool that you wanna get, stand back and wait a few days. By that time the adrenaline rush will have dissipated and you'll be able to make a clear-headed decision rather than one fueled by the rush of, "Oooooh, must have!!"

[Crown]

Just to build on the 'pay yourself first' principle; if you can not save one hours pay of each working day, then you are doing something wrong. This should be your bare minimum in savings. A good tip is to look at your local bank, a lot of them will offer you a linked savings account to your normal account where money can be deposited into the account automatically and if you don't withdraw from it, this secondary account gets a heap of interest.

Just set it up, calculate your hourly rate, and pay your self each week (or month, but week is better, as it's not a large infusion of cash in one hit) to pay into this account 5xhourly rate.

There, now you have a scheme that helps you save money. This is the first step, once you've saved for a year or more, congratulations you've shown that you are responsible, and you've built up a little war chest for yourself to start investing with, and not buying!

This money isn't for saving up for your new X, Y, Z, this money is to help you make more money.

Hope that helps.

[mr friendly guy]

Debit cards don't really help people maintain fiscal responsibility. The kind of person who uses a credit card willy-nilly will do the same thing with a debit card, draining his account on frivolities and then begging his friends and parents for money to pay the rent. And now that almost all banks have "overdraft protection", you can effectively use your debit card as if it's a credit card.

Just for interest, what amount does this overdraft protection usually extend to? Obviously it varies between bank to bank, but is it comparable to the credit limit offered on credit card for people on the same income.

[Darth Wong]

Debit cards don't really help people maintain fiscal responsibility. The kind of person who uses a credit card willy-nilly will do the same thing with a debit card, draining his account on frivolities and then begging his friends and parents for money to pay the rent. And now that almost all banks have "overdraft protection", you can effectively use your debit card as if it's a credit card.

Just for interest, what amount does this overdraft protection usually extend to? Obviously it varies between bank to bank, but is it comparable to the credit limit offered on credit card for people on the same income.

My overdraft protection is $5000 and my credit card limit is $20000, so they don't want to extend you as much credit as the credit-card companies. So yes, a credit-card is even worse, but I'm just saying that people can very easily get themselves in serious trouble with debit cards. Compulsive gamblers, for example, often drain their accounts just before a mortgage payment is due. Talk to somebody who works at a casino sometime; they see sobbing husbands calling their wives to give them the bad news all the time. No credit-card required for this kind of self-destruction.

[Einhander Sn0m4n]

Hey guys. I'm a High schooler, about to graduate in around 8 months or so, and what are some basic ways to learn about all these econimic things. What is the best way to go?

Before you sign a contract, take the time to read it. Salesmen like to pressure you to sign quickly, and you'll feel like you're holding up the process. They will often try to "help" you by conveniently explaining what the contract says, so you don't have to read it yourself. But ignore the pressure. Take the time to read what you're signing, before you sign it. It's amazing how 99% of people will sign something unread because of the social pressure of not wanting to make everyone sit there while they read it. Salesmen know this, and will stare at you while you read it. It will be uncomfortable, but if you sign a contract without reading it, you're just asking to get fucked.

Another thing to consider: He;s a fucking salesman FFS. Hold up the damn process as much you bloody well please, and make it clear to the huckster that if he keeps the pressure on he'll make the sale go pear-shaped as you take your business elsewhere.

[SCRawl]

If somebody steals your debit card and gets your PIN code, you're fucked unless you can prove that it wasn't you who used that money.

I remember hearing a report that if you have a relatively low-security PIN the banks (or whoever holds the policy) would be disinclined to refund your money. (It was on the news, though I can't remember what station.) In other words, if your PIN is 0000 or 1234, you might want to consider changing it.

With respect to credit cards, if they're used as a mere convenient medium for the exchange of money for goods and services, they can be a useful (and profitable) thing. Like many here who choose to do so, I pay my balance every month, and get a rebate for everything I spend. I recall purchasing something for work once upon a time which cost about $5000. I was authorized to put it on my personal credit card -- my company card wouldn't cover it -- and I got about $50 in cash rebate for it at the end of the year for that transaction alone. It's hard to beat a deal like that, if you can get it: free money, and from a no-fee card.