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Call Me Old-Fashioned But... Give me some “credit”

Rose Cora Perry | Interrobang | Opinion | November 8th, 2010

Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.
I once knew a musician who, upon receiving his OSAP cheque in the mail, ventured off to his local music store and blew the whole thing on a Pearl drumkit. As for school? Well, I guess you could say he blew that as well. Now, it goes without saying that musicians typically aren't the most savvy when it comes to managing their finances (a quick review of MC Hammer's history will more than demonstrate what I mean). However, this phenomenon of frivolous and irresponsible spending, especially among the student-aged population, is not exclusive to us artistic types. Case in point: I was at the bank the other day and a teller relayed to me that having a bank account containing several thousand bones is somewhat of an accomplishment. Accordingly, it entitles you to a whole slew of benefits from the elimination of bank fees on personal accounts and annual credit cards, to automatic credit approval.

Realistically speaking though, a few thousands are really nothing — I mean maybe a few months' rent or a really wild party, but after that, I'd be out on my ass in the street if I didn't manage to bring in an income some way or another. Here lies the problem: automatic credit approval and credit cards have not only made us completely lose sight of the true value of anything monetarily-speaking, but it also has and will continue to lead to economic crisis. But, is it the fault of the banks? I'd argue not entirely.

Banks are money-making institutions. They approve you for credit, and the longer you take to pay off your expenses, the better the business is for them. Admittedly, in recent years, several institutions got greedy and handed out credit approvals far too easily. But look where they are now - it's not like they didn't get their just desserts, too.

Stories like the one I opened this piece with are FAR too common. While in these situations, it'd be easy to blame the banks for approving said individuals in the first place — as extensive employment and credit checks are supposed to be run prior to being approved for loans, grants or mortgages — you cannot always predict who's just going to take a loan and run with it. Further, when you receive advanced monies from a financial institution, you are required to sign legal documents binding you to the responsibility of paying back the monies with interest within a certain timeframe. Therefore, the people who are taking advantage of the credit system we have in place are not only spitting in the face of the banks, but also in the face of the entire legislative structure we've established, not to mention they're making it increasingly difficult for those who truly need the startup capital (e.g.: small business owners, students, first-time homeowners or car purchasers) to get approved.

Essentially, relying on plastic for everything — which by definition means putting off all expenses to a future time when you hope to have more money — is not a smart idea for anyone. Further, buying “toys” with money that could be put away for serious and meaningful expenses in the future might be something you want to consider.

Maybe I'm at an advantage here because my pop's an insurance advisor, but no matter what bad financial situation I've been in for the past several years, I've consistently put away $100 to $150 per month into a retirement savings plan for my future. When we were kids and our parents bought us piggy banks, we seemed to have the right idea. We'd save, save and save until we had enough to purchase something really valuable to us, or better yet, we put it all into the bank for good. Somehow, as we grew older (and clearly not wiser), we decided instead that buying that video game or wasting all of our funds on getting trashed was sufficient for our futures. We could just use plastic on everything anyway and live in debt. Well, there's certainly no longer a stigma attached to this idea, as it has become the norm.

But here's the thing: you never know what the hell is going to happen in your life. You know that age-old expression,“The best-laid plans of mice and men oft go awry.” I don't know about you, but I certainly don't want to spend my entire existence chained to a desk. Perhaps you should all be asking yourselves very seriously, “How much money do I actually have in the bank?” If you're bargaining on surviving on just a few grand (or less) come hell or high water, you've got another think coming. Start saving now. Start saving while you're still young. According to recent statistics, the average Canadian is not safe financially (i.e.: living comfortably with all the amenities, and I'm sure parents still provide for many of you) at retirement age unless they've got a few million.
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