Friday, May 4, 2007

How much are we messing up our kids? - Part I

If you haven't already, bookmark this website: It contains a mountain of financial statistics for the country. We have a revolving outstanding credit card debt in this country of about $3,000 per person. When you look at the economy and how the average American is keeping themselves in the middle class by spending more than they earn you have to wonder what kind of message this sends to our kids.

Maybe parents don't even let their kids in on their dirty little secret: we're in debt up to our eyeballs. And herein lies the problem. Our generation (20s-40s) grew up out of the economic boom and social revolutions of the 50s and 60s. We grew up with microwaves, cable TV, air conditioning in every home and two cars in every garage. The feminist movement and medical breakthroughs in easily-accessible contraceptives meant that couples were having children on their own terms, later in life and when they were more financially stable.

The result is a bunch of kids who never knew the 'lean years' of their parents, when it was a tough job just to put food on the table. Dad (and usually mom) had one good paying job, a nice pension and/or 401k and looked forward to a social security check. Before the sudden slew of sneaky credit cards, their credit was relatively good and their revolving debt low. "Debt" was a mortgage, and a car payment. Add to it the self-esteem movement where every kid was drilled into believing they could do anything, could have anything, and could be the best at whatever they wanted. And thanks to mom and dad's financial successes, we actually did have it all.

So here we were, born into this lavish lifestyle, and suddenly we're out on our own. But something went wrong. Where were the six figure jobs? Where are the assets to buy that new car? Wait...I have to build credit? However the struggles, we were told from the beginning that we were entitled. We deserve that great job, that big house, that luxury car. We can't have it? Blasphemy!

Enter the credit card industry, our caped hero to rescue us from harsh reality. Can't afford college? Finance it! Can't afford that car? Finance it! Need groceries, gas, a rent payment, some new clothes, a fancy dinner, but don't have the cash? Finance it! Interest? Don't worry about that, your monthly payment for all this is only $20 a month. Look at that! We can live just like our parents, right out of the gate!

And then we started having our own kids. (continued...)

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