Britons face 'lifetime of debts'

[Admin]

http://news.bbc.co.uk/1/hi/business/5009510.stm

<blockquote>"Low income, combined with badly informed and poorly understood financial decisions, are at the root of many of our clients' debt problems," David Harker, Citizens Advice chief executive said.</blockquote>This is not the sort of thing that many skeptics bother looking at. However, I think that this is the sort of issue that is well within the scope of skepticism and critical thinking.

To me, skepticism is all about making decisions: to believe something or not; to choose one course of action over another; etc.

If people were a little more aware of the implications of large borrowing they might just be less inclined to do it.

I often try to get across to people that when you borrow money it's not really the bank's money you're spending (something many people say) it's your own future income.

Interest payments sap your wealth too. Not only is it dead money, you have to earn it and pay tax etc. on it before you hand it over.

[tkingdoll]

John, I agree 100% about your definition of skepticism.

I often talk to my mum about skepticism, because she is struggling to understand what this thing is that occupies all her daughter's spare time ;D

I tell her (and other people) "It's a set of tools to help you analyse what people ask you to believe - it's not about ghosts and psychics, it's about being able to assess all the information before you make a decision - and that applies to every aspect of your life". I often give example of day-to-day decisions that skepticism can help to clarify, and money is a good one (as it's a subject dear to everyone's heart!).

For example, critically analysing that new credit card offer that sounds so good (like those damn credit card cheques they are so fond of - boy those things are evil!) - or being aware of compound interest so you can analyse your monthly statement properly and work out how long your repayments will take based on your current pattern. These are not things the card companies want you to know, so they will hide behind their carefully-worded forms, marketing literature and statements.

I think consumer choices are a big part of skepticism, and vice versa. Assess a claim before you believe it - why is that so hard for most people to grasp?

[Dr B]

being married to an financial expert and accountant means my wife has a thing for spreadsheets (she has one for everything!!!). I use to simply look at my statements and say...yeah thats about right.....not her!!!

However, I have to say I have learned a great deal over the years about money. I know the government do not want us all to understand it too well, otherwise many of us would be much better off. However, I must confess that we are still both skint as we have been students for many years, and just bought a house (and what a bloody nightmare that can be.....).

I think there was a survey some time ago showing that 30% (ish) of people did not know what APR actually meant........oh dear..... :o

[Admin]

I think that people in general (including myself in the past) are apathetic towards money and finance ??? The rule of thumb seems to be that if you have enough income to meet your monthly outgoings then you're doing fine! - something used by advertisers: "how much a month is that?" ;)

Instant gratification is a concept that is now taken as the norm (as opposed to deferred gratification) and this 'buy now, pay later' mentality really does lower people's real wealth. :(

Again, the concepts behind all this are not difficult to grasp but people just do not stop and think!

[tkingdoll]

Again, the concepts behind all this are not difficult to grasp but people just do not stop and think!


So true. I get infuriated by the lack of common sense amongst people I know. Example: my mother has some credit card debt. She recently boasted to me that she's meeting her monthly payments AND has managed to save a little nest egg.

It wasn't until I pointed out to her how much less the interest on her savings was than the interest she was being charged on her debt that she realised how silly it is to have savings when you have compound interest accruing on cards. Ho hum.