Not too long ago, I read an article in either New York Times or Washington Post about more and more parents are teaching their children at an early about financial responsibilities which they didn't learn from their parents. I hope that I can still find that article. But in essence, given the amount of paycheck that you get, taking out of the monthy bills, and other expenses, how much do you have left. And what extra expenses would you have to avoid so that you will have enough for the month. This gives a child some perspective when he/she wants to buy a toy or the latest fashion, what else do they have to give up.
Credit card debts are a major issue. I have a credit card, but I tried to use it as little as possible and try to pay it off every month. One time I had about a $55 purchase, and the bank mistakenly included late fee penalty, which came about $15. I was shocked. I never realized how much interest and penalities can get accumulated since I always paid it off on time.
This is also becoming an issue oversees particulary for those countries that never had credit cards before and all of sudden, the government opened up and allowed the market. It's great that you don't have to pay at the time of the purchase and right away, but you still need to pay. People don't realize it and use it as if there is no end. Many people maxed out their credits in a very short period. And these credit cards also target the college students. It's so easy to get one, and many of these kids are in debt before they graduated and have a real job.....
>>> Robert C Bowman <[log in to unmask]> 04/20/07 8:16 AM >>>
This is a huge issue.
The "necessities" involved can be food, gambling, cell phones, cable,
utility bills, or housing.
The human carnage is significant as the issues divide marriages, divide
parent from child, and more. The situation also makes it more difficult for
legitimate businesses, grocery stores, and others to function in lower
income areas, as money is siphoned off.
A noted law school professor was on NPR discussing credit, such as taking
80 senior law students hours working together to figure out that a 3%
rebate card was actually a 17.8% card reduced to 14.8% by the 3% rebate,
but even then they were not sure. also noted that credit card companies
manage to keep out the one line on the credit card statement that might
influence people not to use the cards. This line is a statement regarding
the number of years and months that it will take to pay off the card using
the minimum payment. When people see "29 years and 3 months to repay," they
might get the idea that use of the cards is a bad idea.
This is becoming a major growth industry for Omaha, not long after gambling
appeared in Iowa across the river and also perhaps associated with our
national leadership in STDs and our top 10 ranking for metro areas.
All involve concentrations of wealth in some unproductive and damaging
ways, especially damaging to lower and middle income peoples.
Robert C. Bowman, M.D.
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