SAVING MONEY IS A LOST SKILL
One thing I have learned from the coronavirus outbreak is the fact that saving money is no longer a part of the Australian culture.
When I was growing up, one of the very important impressions placed upon me was a belief in the wisdom of saving in order to spend. My parents particularly put a stress on the importance of having money prior to making purchases.
When I was a young man, the idea of buying goods on spec was frowned upon.
Obtaining goods before having the wherewithal to buy them was called “hire purchase”. The practice was rather discouraged. One of the touted disincentives that was touted was the inadvisability of having to pay extra for goods by way of interest on top of what was being borrowed.
Fast forward 50 or 60 years and Afterpay, and other schemes encouraging people to “buy now and pay later“ are all the go.
People think nothing of paying extra for goods by way of interest on purchases and don’t consider interest as being dead money. Over the course of their economic lifetimes too many people are paying tens of thousands of dollars in debt money: Interest paid is dead money.
I fully understand and appreciate the need for mortgage arrangements for house purchases and even for the buying of a motorcar. However, the idea of living from hand to mouth in daily living terms is anathema and it’s something that has always filled me with horror.
To learn that Australian households are the second most indebted in the world (behind Switzerland) is absolutely awful! For every one hundred dollars of income households earn, they are in debt for $120. That’s all about expenditure over income and the multiplier effect over time is quite deadly.
No wonder people are broke!
If anything, I hope the COVID-19 might reinstitute thinking about the wisdom of saving so that the day income ceases is not the day abject poverty commences.