Wow! It’s Wednesday!: Generation Debt
2 stories that I want to share with you:
1) I was listening to NPR the other day and a story came on about how college students are dealing with the current economic crisis. There was the usual, kids wanting to drop out to help their parents, and kids worried that they would have to drop out because their parents had been laid off. But then came the story of one female student who showed up in a counselor’s office in tears because one of her parents had taken out a credit card in her name and effectively ruined her credit.
2) The other story, is something I saw cited many places online. According to an ING study, black women give away too much money to their family, friends and church and this has compromised their ability to save or achieve the kind of lifestyle that they deserve. Apparently more than a third of all black women gave away more than $1000 to family and/or friends in the past year. We also spend too much money on “br
I found both of these situations interesting, because even before the economic crisis, I had personal experience with women whose parents had taken out credit cards in their name. I think it might actually be a common grievance, just rarely talked about because it’s a “family matter.”
As for the other story, same thing. Sadly, my sister was one of these women until I finally managed to find a decent job, and I still feel guilty about that. For a long while there, I was just rotten with money. You see, I’m still paying off my student loans (until I’m like 60), but I never received any kind of money education from my parents, other than my mother once telling me to “never lend more than I can afford to lose” and to consider all loans “gifts” and to always assume that I will never get the money back — this was great advice, but not nearly enough.
I don’t blame my parents. Debt was new to them — I can still remember when they got their first credit card – and I’m not surprised that they never grasped its far-reaching effects or taught us to handle money wisely. I’m sad that my father continues to be a slave to materialism and insane amounts of debt, but at least I know that I’m not and that I’ll do my utmost to make sure my children aren’t either.
Like I’ve been saying in past columns, I’ve been educating myself about money and debt over the last few non-starving-artist years, and I’ve talked to CH often about giving our children a thorough money education, so that they don’t fall into the same traps that I did. CH and I are both self-taught as far as spending money (somewhat) wisely goes, and I would like for that learning-the-hard-way mess to stop with us.
Anyway, this is all to say that I’d like to start a conversation about how different generations think about debt, and how we can prevent the next generation from making the same mistakes that we have. Please discuss in the comments.
Oh, and if you’re one of the many black women that reads this blog, you definitely want to read the full study here. Interesting but disturbing stats galore.
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Money is something I try to talk a lot with my kids about. They go to school in Plano Texas which is the wealthiest large city in America according to Money magazine. I know twelve year olds with seven jeans and coach handbags. Nine year olds with I phones and teenagers driving Escalades and BMW’s. I wonder how these kids will cope when they are on their own and paying their own bills. I don’t know if it is like this everywhere, I hope not or we will have a new generation of people who are in even worse debt than ours is. My kids are stuck with whatever is on sale or what we can find at the resale shops. They aren’t always happy with me but I hope they are learning a lesson. It is after all my job to raise my kids to be responsible caring adults not to make sure they are never unhappy as children.
Money is something I try to talk a lot with my kids about. They go to school in Plano Texas which is the wealthiest large city in America according to Money magazine. I know twelve year olds with seven jeans and coach handbags. Nine year olds with I phones and teenagers driving Escalades and BMW’s. I wonder how these kids will cope when they are on their own and paying their own bills. I don’t know if it is like this everywhere, I hope not or we will have a new generation of people who are in even worse debt than ours is. My kids are stuck with whatever is on sale or what we can find at the resale shops. They aren’t always happy with me but I hope they are learning a lesson. It is after all my job to raise my kids to be responsible caring adults not to make sure they are never unhappy as children.
Money is something I try to talk a lot with my kids about. They go to school in Plano Texas which is the wealthiest large city in America according to Money magazine. I know twelve year olds with seven jeans and coach handbags. Nine year olds with I phones and teenagers driving Escalades and BMW’s. I wonder how these kids will cope when they are on their own and paying their own bills. I don’t know if it is like this everywhere, I hope not or we will have a new generation of people who are in even worse debt than ours is. My kids are stuck with whatever is on sale or what we can find at the resale shops. They aren’t always happy with me but I hope they are learning a lesson. It is after all my job to raise my kids to be responsible caring adults not to make sure they are never unhappy as children.
Interesting post. My parents never really talked about money when I was growing up. They did lead by example in that they were pretty frugal. I attribute that to the fact that they both grew up in families that were poor to parents who grew up during the Depression. Their frugality and wise investing has literally paid off in the long run and I hope that my own somewhat miserly ways will do the same. Of course, it also means that I’m not good at treating myself and that I’m terrified of large purchases. I guess the lesson is moderation and learning which purchases are an investment (like, say, a trip to Belgium!).
Deb
Interesting post. My parents never really talked about money when I was growing up. They did lead by example in that they were pretty frugal. I attribute that to the fact that they both grew up in families that were poor to parents who grew up during the Depression. Their frugality and wise investing has literally paid off in the long run and I hope that my own somewhat miserly ways will do the same. Of course, it also means that I’m not good at treating myself and that I’m terrified of large purchases. I guess the lesson is moderation and learning which purchases are an investment (like, say, a trip to Belgium!).
Deb
Interesting post. My parents never really talked about money when I was growing up. They did lead by example in that they were pretty frugal. I attribute that to the fact that they both grew up in families that were poor to parents who grew up during the Depression. Their frugality and wise investing has literally paid off in the long run and I hope that my own somewhat miserly ways will do the same. Of course, it also means that I’m not good at treating myself and that I’m terrified of large purchases. I guess the lesson is moderation and learning which purchases are an investment (like, say, a trip to Belgium!).
Deb
Hahaha. Debra, I’m doing Belgium on free airline miles and my sister’s job is paying for hotel and board, so not quite an investment on my part — I’m not in my 20’s anymore. There’s something in me that won’t just let me pick up and go like I used to — in fact my last pick up and go trip was London in grad school with only $400 in my pocket. So much fun, but man, I wouldn’t do that again!
I, too, am afraid of big purchases. Buying my Echo by myself was one of the most upsetting experiences of my life, and CH had to talk me down off a ledge after every IVF payment. I seriously thought about skipping it altogether and going straight to adoption — that’s how much I hate big purchases.
Anyway, you’re so lucky that you had good examples.
Angela, L.A. is much like Plano. I can’t tell you how many times a car full of teenagers have pulled up in a Cadillac Escalade beside me. It makes me very concerned about raising kids out here. But I’m okay with our hypothetical kids hating me a bit. I remember getting so angry at my mom about so many things, but now I consider them valuable lessons learned.
As long as you teach your kids to be responsible, not over-extend themselves, plan for the worst but hope for the best, and know that they need to learn about (and use) credit responsibly, they’ll be fine.
I didn’t have a credit card in college. I didn’t have one until I was 25 – and even then, didn’t use it for years. Now I just use it as it’s easier than carrying cash and I pay it off every month. My parents taught me that if you don’t have the money for something, then you don’t buy it until you do. Apart from a major purchase, like a home or car or higher education, you shouldn’t be using credit recklessly. Dining out at the Chateau Marmont every night and just paying the minimums on your credit cards is a sure road to bankruptcy (unless you meet a star during dinner and he/she whisks you off your feet.)
Interestingly enough, in Aramaic (the language of Jesus), the word for “debt” and “sin” is the same. (Could be an interesting Thought Chuck – a “Thus Sayeth the Lord” Edition…)
As long as you teach your kids to be responsible, not over-extend themselves, plan for the worst but hope for the best, and know that they need to learn about (and use) credit responsibly, they’ll be fine.
I didn’t have a credit card in college. I didn’t have one until I was 25 – and even then, didn’t use it for years. Now I just use it as it’s easier than carrying cash and I pay it off every month. My parents taught me that if you don’t have the money for something, then you don’t buy it until you do. Apart from a major purchase, like a home or car or higher education, you shouldn’t be using credit recklessly. Dining out at the Chateau Marmont every night and just paying the minimums on your credit cards is a sure road to bankruptcy (unless you meet a star during dinner and he/she whisks you off your feet.)
Interestingly enough, in Aramaic (the language of Jesus), the word for “debt” and “sin” is the same. (Could be an interesting Thought Chuck – a “Thus Sayeth the Lord” Edition…)
As long as you teach your kids to be responsible, not over-extend themselves, plan for the worst but hope for the best, and know that they need to learn about (and use) credit responsibly, they’ll be fine.
I didn’t have a credit card in college. I didn’t have one until I was 25 – and even then, didn’t use it for years. Now I just use it as it’s easier than carrying cash and I pay it off every month. My parents taught me that if you don’t have the money for something, then you don’t buy it until you do. Apart from a major purchase, like a home or car or higher education, you shouldn’t be using credit recklessly. Dining out at the Chateau Marmont every night and just paying the minimums on your credit cards is a sure road to bankruptcy (unless you meet a star during dinner and he/she whisks you off your feet.)
Interestingly enough, in Aramaic (the language of Jesus), the word for “debt” and “sin” is the same. (Could be an interesting Thought Chuck – a “Thus Sayeth the Lord” Edition…)
Ernessa, I am one of those black women who probably gave (and still does give) way too much to family and friends. But back in college, I would give until it hurt and way beyond. Meaning I put myself into debt to give money and “things” to my family that I really could not afford to sacrifice. I guess it was out of a sense of responsibility….or funny maybe indebted to my family for the sacrifices they made (particularly my mother) that allowed me to go to college, graduate school, etc. It ruined by credit, but truthfully I have no regrets even though I spent the past ten years getting my credit straight. And to be perfectly honest, I also played a hand in ruining my credit in college. I was one of those people who applied for every credit card that was offered outside of the mailroom (and got every “free” gift) and purchased lots of things I did not really need. It’s no excuse but I think it was because I grew up poor and there were lots of things I just could not have. So credit cards opened up doors (and wounds) that lead me far down the wrong path. But I remember the day when they all changed.
My husband and I went to buy our first house shortly after we got married. We applied for a loan and turns out that my credit was so bad, the loan officer recommended that my husband purchase the house under just his name. And that’s what we did. I was so humiliated and scared. I started working on my credit right then. Today, I have great credit. And the house we live in today is ours – not his – ours! My car is mine. And when I do occasionally need to apply for credit, I am never afraid of being rejected. And although I still give to my family and friends, I do not do so at the expense of my own family (e.g., my, my husband and my son). And sometimes I just say no.
But I worry about our generation and credit, retirement, savings, etc. Especially now that employers run credit checks, insurance uses credit as an eligibility criteria, etc. This is serious and I am not sure people are paying attention. The retirement issue worries me as well. I keep having conversations with friends about how social security will not be around when we retire and everyone agrees. But then I ask if they have retirement savings and they say no.
Ernessa, I am one of those black women who probably gave (and still does give) way too much to family and friends. But back in college, I would give until it hurt and way beyond. Meaning I put myself into debt to give money and “things” to my family that I really could not afford to sacrifice. I guess it was out of a sense of responsibility….or funny maybe indebted to my family for the sacrifices they made (particularly my mother) that allowed me to go to college, graduate school, etc. It ruined by credit, but truthfully I have no regrets even though I spent the past ten years getting my credit straight. And to be perfectly honest, I also played a hand in ruining my credit in college. I was one of those people who applied for every credit card that was offered outside of the mailroom (and got every “free” gift) and purchased lots of things I did not really need. It’s no excuse but I think it was because I grew up poor and there were lots of things I just could not have. So credit cards opened up doors (and wounds) that lead me far down the wrong path. But I remember the day when they all changed.
My husband and I went to buy our first house shortly after we got married. We applied for a loan and turns out that my credit was so bad, the loan officer recommended that my husband purchase the house under just his name. And that’s what we did. I was so humiliated and scared. I started working on my credit right then. Today, I have great credit. And the house we live in today is ours – not his – ours! My car is mine. And when I do occasionally need to apply for credit, I am never afraid of being rejected. And although I still give to my family and friends, I do not do so at the expense of my own family (e.g., my, my husband and my son). And sometimes I just say no.
But I worry about our generation and credit, retirement, savings, etc. Especially now that employers run credit checks, insurance uses credit as an eligibility criteria, etc. This is serious and I am not sure people are paying attention. The retirement issue worries me as well. I keep having conversations with friends about how social security will not be around when we retire and everyone agrees. But then I ask if they have retirement savings and they say no.
Ernessa, I am one of those black women who probably gave (and still does give) way too much to family and friends. But back in college, I would give until it hurt and way beyond. Meaning I put myself into debt to give money and “things” to my family that I really could not afford to sacrifice. I guess it was out of a sense of responsibility….or funny maybe indebted to my family for the sacrifices they made (particularly my mother) that allowed me to go to college, graduate school, etc. It ruined by credit, but truthfully I have no regrets even though I spent the past ten years getting my credit straight. And to be perfectly honest, I also played a hand in ruining my credit in college. I was one of those people who applied for every credit card that was offered outside of the mailroom (and got every “free” gift) and purchased lots of things I did not really need. It’s no excuse but I think it was because I grew up poor and there were lots of things I just could not have. So credit cards opened up doors (and wounds) that lead me far down the wrong path. But I remember the day when they all changed.
My husband and I went to buy our first house shortly after we got married. We applied for a loan and turns out that my credit was so bad, the loan officer recommended that my husband purchase the house under just his name. And that’s what we did. I was so humiliated and scared. I started working on my credit right then. Today, I have great credit. And the house we live in today is ours – not his – ours! My car is mine. And when I do occasionally need to apply for credit, I am never afraid of being rejected. And although I still give to my family and friends, I do not do so at the expense of my own family (e.g., my, my husband and my son). And sometimes I just say no.
But I worry about our generation and credit, retirement, savings, etc. Especially now that employers run credit checks, insurance uses credit as an eligibility criteria, etc. This is serious and I am not sure people are paying attention. The retirement issue worries me as well. I keep having conversations with friends about how social security will not be around when we retire and everyone agrees. But then I ask if they have retirement savings and they say no.