How the Older Men View Debt
Have you noticed that the older generation was not as comfortable with debt as the newer generation? I remember how my late Grandmother would always frown upon any kind of debt. My late mother who was the finance manager of my Dad’s business would always be so deliberate in reducing the company obligations and would never get into any consumer type loans. My mother would always discourage forms of borrowing and was not even comfortable with home amortizations.
“Have you ever heard of the generational theory? The concept is that there are very different cultures, including money cultures, depending on how old you are. People from the Depression/World War II generation (the “Builders”) hate debt, whereas people from the iPod generation (the “Millennials”) tend not to worry about borrowing. Builders pay cash; Millennials just get another credit card.”
“When it comes to borrowing, the Builders are wiser. Every financial planner worth a dime will tell you to pay down debt as rapidly as possible. Interest payments just eat cash. Out-of-control debt also destroys your credit rating and makes it harder to get a decent loan on really important things like a home.”
“Paying down debt ASAP also applies to personal loans from relatives or friends: “Do not say to your neighbor, ‘Come back later; I’ll give it tomorrow’ when you now have it with you” (Proverbs 3:28). That’s not only good financial advice. It may also save a friendship.”
It seems that our parents, grandparents and great-grandparents were more prudent when it comes to their view of debt. It’s time to re-learn the old ways.
Read Randell Tiongson’s blogs of personal finance at www.randelltiongson.com