Editorial: Youth need debt lesson

18:51, Aug 18 2014

No one, surely, should be surprised to hear that young South Canterbury men are falling into the trap of easy credit.

What was perhaps more surprising in the story we ran on Friday was the New Zealand Bankers' Association's apparent astonishment at the suggestion that banks and other financial institutions were making it far too easy for that to happen.

Really? Hands up everyone who has been offered a credit card without asking for it, or wanting it, and knowing that there just isn't the spare money to service credit card debt.

And many of us could probably confess to getting into strife at some point, by not fully understanding just how rapidly a credit card bill can grow once interest starts piling on, or the penalties involved with late payments on a hire purchase.

The Timaru Budget Advisory Trust's staff and volunteers have been in the business of helping people manage their money for years, and there wouldn't be many pitfalls and perils that they haven't encountered.

So there's little reason to believe they'd have got it so wrong when they point the finger at lenders.


And, after all, your bank is there to make money. It's not a benevolent society wanting to make you happy by providing you with the wherewithal to buy that sweet ride, or the latest and biggest flat screen tv. Your car or telly are just the happy side effect of the bank's money-making efforts.

The other points trust co-ordinator Don Macfarlane makes are also valid; our "got to have it now" mentality, and the "head in the sand" tactic that will often prevail when a person realises they're in trouble.

So where does the responsibility lie? There's certainly a case for insisting banks are responsible and realistic. But our young people also have to learn to stand on their own feet, and be responsible for their choices - Macfarlane counsels against parents bailing out their debt-ridden offspring.

As New Zealanders, we're often a bit prudish in a financial sense; discussions about bills and mortgages, or credit cards and hire purchases are not seen as family fare, but rather something for the adults to take care of after the kids have gone to bed.

Maybe we need to be a bit more frank, and a bit more proactive, so that when we send our children out into the world they're got a better understanding of financial matters than we did, and are better equipped to deal with the temptations of easy money.

The Timaru Herald