I know prices are steep nowadays - they were in my day. My Dad had to underwrite our mortgage and the families clubbed together to find the deposit. But we were the ones who had to meet the monthly payments and each month was a struggle - for several years.
The attitude towards money seems so different nowadays. Something I simply cannot get my head around.
student debt is horrible - but why add to that horror by buying such a car - it simply does not make sense.
Obviously, a university education does not necessarily mean that the person has an ounce of common sense -
(My young brother had second-hand motor bike for his university days.)
Not quite the same in France as in UK, until recently you couldn’t have an overdraft - in the early 80s as a student in GB everyone had an overdraft as a matter of course. Debt is still seen here as a necessity for somethings eg mortgages but otherwise as something stupid people go in for.
Not sure when “your day” was but in 1970 the average house price (according to an article on the Sun Life website) was just under £5k - and the average wage was just over £28 per week (source Hansard) or £1456pa - so houses were just over 3x salary.
Today the average house is, as above £226k and the average salary £36.6k (source ONS) or nearly 7x salary. In London the average salary probably isn’t much more but the average house is more like £450k.
I imagine France will “catch up” soon enough.
I blame student loans to quite a large extent - it normalises debt for everyone, tacking on 20k for a car doesn’t seem so bad when you owe 60k for your education - and of course it isn’t technically a loan with PCP.
Financial chit-chat can go on for ever and we shall not fall out, even if we fail to understand each other.
I have young friends in UK and listening to them, I am astounded at what they spend and what they buy. There seems to be a lot of peer pressure and debts/credit cards etc etc (as you suggest) are seen as part of life.
Trying to explain to them that if they only bought clothes/makeup (whatever) when they could afford to do so- they would be better off financially - meets with rolling eyes and gentle smiles. No, no, Stella. These things have to be done… I must have my eyebrows plucked, my nail/hair extensions (or whatever else) done or life simply is not worth living…
I love them dearly, but I do not understand them. Pay Day comes and for 30 seconds all is well - then the card-repayments wipe it all out. Arrrrrgh
I think it depends on the person. One of my children finished uni in 2006 with an overdraft the other left in 2013 with a £100 in her bank. The younger one arguably had it a bit tougher as the course she was doing meant rehearsals and performances in the evenings therefore she couldn’t get a part time job.
She’s the only student I know who would ask for a glass of tap water and a packet of quavers in a nightclub.
Am I right in thinking that Islam doesn’t allow individuals to make money from money lending? So - it doesn’t have to be like that, there are other social models.
Try telling that to the Tories though.
Ah yes, the Shakespearean “pound of flesh”. More than a pound nowadays, I think, and from whose fair body is it to be sliced off, I wonder, and who will wield the butcher’s knife?
Am I right in thinking that Islam doesn’t allow individuals to make money from money lending
No it doesn’t, so if you are a Muslim you either borrow for no charge from another Muslim, or you have to borrow from a Jew or a Christian who have similar restrictions regarding making money from usury among their coreligionists. One of the ways round paying for borrowing or transferring money is the hawala system which is still in use now, so clever (invented to keep people safe on the silk road and other trade roads but now subverted and used for nefarious purposes because not traceable)
Or you enter some clever arrangement whereby one adheres to the letter of the law so the effects are much the same as a loan, just no loan is involved. Such as the bank buying the house and you paying them rent for an agreed period, after which the bank gives you the house.
All children are so different - which makes for very different future-adults
My Primary School introduced a Savings idea - Savings Stamps 6d each, I think.
Anyway, Dad offered to pay 6d weekly, for each of us, if we wanted to join the Scheme. We would not be allowed to spend the money on anything else - just save it.
Elder sister and brother weren’t interested. I and my little brother both said - yes, please
For me - it got me into the way of saving. I enjoyed watching the money grow. When I was older, adding to the funds through jobs after school. It was a thrill to finally buy - whatever I had been saving for.
For my younger brother - it was the start of a lifetimes’ pleasure watching money grow. To make him spend, almost took physical force.
Inevitably, there will always be people whose only interest in systems is milking them.
But I still feel it’s better to have “good” rules in place even if people get round them, rather than to have rules that sanction and even encourage money-worship.
This idea that debt is what makes the world go round is tosh. Trade is what makes the world go round and prevents wars. Debt just allow you to buy it today.
And really this is the point.
Do you really absolutely need to have that newish luxury German auto today. 2) Can you buy something else within your pay scale and doesn’t this require more consideration?
Debt allows you to think about the second question some other time.
And for some it catches them out. My complaint is that this lady in the article has such a poor character, she is blaming her position on someone else. Suck it up lady. Its all you.
Yes but without funds you can’t trade, see point 1
In many ways this is what the Brexiteers miss - they are stuck in the mid-late 20th century when trade was “everything”, non-trade barriers and service industries were not so much of a thing, debt was not providing 80% of the money supply and trading conditions were not yet coalesced around large super-blocks (of which membership is hugely beneficial).
That said being stuck with late 80’s/early 90’s thinking is better than Corbyn who is stuck somewhere around 1973.
Well, her parents are - couldn’t have been their precious daughter’s fault, after all.
The irony - as I said above - is that she very probably would have “passed” an affordability test.
Hi Paul, I think we are talking about two different things here
Private debt (and by that I mean personal debt, not country or company debt) is a relativity new phenomenon that started in the 50’s with the Diner Club card.
Buying today and paying tomorrow has enticed many people and is a significant factor in the countries economy. However this (your) notion that this is the state of the world and it is what it is… and we are all passengers is not true.
Free thinking individuals choose to go to university and incur fees. That girl (and her dumb parents) chose to buy the car. People choose to rank up expenditure on cards and fritter their salary at the bookies.
Its a choice. To suggest otherwise is ridiculous.
Sure people get suckered in by advertising and societal norms and that’s OK. Buying expensive cars on tick is fine by me. Buying “lifestyle” is OK too, What ever you want to do. Being in debt is not in itself a bad thing and played strategically can be of great benefit.
However taking on debt requires judgement and understanding of the consequences if in default. Sure she passed the affordability test…great.
But don’t blame the system for NOT STOPPING you. That’s wrong Paul IMO.
I don’t think the Brexiteers miss anything and your association with this topic too broad. Lets not get started on Brexit please.
I disagree Peter. Lenders have an obligation to ensure the people they are lending to are able to repay. This kid walked in off the street and was signed up for a 20K debt. That was great for the car salesman, the credit company and the Garage., not good for the customer. That’s reckless lending and what the whole subprime crisis was all about.
She should give them back the car and tell them to take a hike.
