Living large, just like who?

When I started college back in the early/mid 1990s, the student union was lined with tables staffed by employees from credit card companies. Every table was covered with cheap things emblazoned with company logos...Discover, AmEx, Citi, etc. etc. You couldn’t walk through the main hallway without getting pens, mugs, t-shirts, key chains, and Frisbees thrown at you, along with the application form to get a new credit card.  This phenomenon was relatively new at the time. We filled out applications, got our credit cards, and voila! You had money for those jeans you’d been dying to get since last year.

Colleges I believe have since cracked down on this practice of enticing young, impressionable cash-poor college students into getting credit cards they may never be able to pay for. I was in college when this practice was almost predatory. Then, many kids signed up for card after card, subsequently shopped (some paid rent with their credit cards, or bought books) but with no plans or prospects for paying it off.  Once, when I had a roommate, I realized how real the consequences were: she’d spent a ton of money on things she may otherwise not have purchased, could not pay the bills, and we lived with phone calls from credit card companies at all hours of the day and night. She simply dodged them, and I learned about what I did not want in my life: owing money on a credit card I cannot pay.

I succumbed to the credit binge by the way. I had been eyeing several cds (remember, this is the 1990s), and of course my little student job was not enough to cover both living expenses and cds. So Discover stepped in. But 300 dollars later, I started to panic, and I stopped spending. I gradually paid off this card slowly and painfully.  Ever since college, I have been particularly respectful of credit cards, and wary of the ease with which one could get carried away in the false sense of having resources for things we could have easily done without.

                                                             

I bring this up because I have seen a lot of people recently come to the brink or actually cross into filing for bankruptcy. Given the state of this economy, I am not surprised by this fact. What is absolutely shocking is how much people owe in credit card debt. I don’t know how one keeps going after exceeding $10,000, $20,000 or even $40,000 in credit card debt. This is on top of spending on expensive cars one could clearly do without, furniture, clothes, homes, you name it. There is some element of my bias here, but I’ll go out on a limb and suggest that a car payment of $900 a month is excessive for most people. (I suppose, if you have to drive a Mercedes, Lexus, Range Rover by all means necessary, then $900 is not excessive.) It is also excessive and wrong to spend money frivolously with no intention of ever paying it back. So that lesson I learned as a teenager in college, I now see 35 and 40 year olds who never learned them, and with severe financial consequences that far eclipse any damage one can do at 18 or 19 years old.

Just saw this on some web site www.zazzle.com Get it as a gift for someone in need of this little reminder.

 I will also go out on a limb here and say that the problem with spending is not always that people simply got caught in the bad economy. Many people simply wanted to live large, and take short cuts to getting there. Yes, a lot of people lost their jobs and have had a hard time getting back in to the workforce. But many people have simply spent themselves silly in an effort to not only keep up with the Joneses, but to be the Joneses. They have lived large with nothing to back it up. In the end, it was all a lie, a charade, and now their actions have caught up with them.