Debtland....warning Soapbox moment.


Last night the ABC screened a programme on Four Corners about the debt crisis and focused on one family in the outer suburbs of Sydney who were losing their house. You can see the programme by visiting www.abc.net.au/fourcorners.

The wife in the story spoke about how they had huge debts because the banks 'let them'. Credit counsellors spoke of people in good jobs visiting charities for food because they had 'maxed out' their credit cards and couldn't keep up with their mortgage payments.

Am I heartless for thinking ' as you sow, so you reap' ? I noticed that the house that was being repossessed was far from your three bedroom, one bathroom style of place. It was huge ! Whatever happened to starting out small with a cardboard box under a piece of material for the coffee table? Or having hand me down furniture for some time ? Why do you have to have the huge stylish house the moment you are married. There is not much scope to move if interest rates go up or the wife falls pregnant and can't contribute to the mortgage repayments. But are the banks to blame ? That's like saying McDonalds is to blame for our obesity because they say 'do you want fries with that' and we respond 'yes'. Where is the self responsibility and self accountability ?

We live in a small cottage style house. We have been renovating it for over 11 years now! LOL Well... what I mean, is that the house changes as our family grows. We have taken out walls, closed in verandas, built on to the back of it. It expands as we do. Sometimes I think it will be lovely to move to a bigger, newer, place. When I think about it though it's mostly for the land space, not necessarily the size of the house.

The one thing that keeps me here is that we own it. We finished our mortgage and it's ours. That allows me to sleep at night. I am not trapped in a job I hate because of mortgage payments. I am not worried by interest rate rises.

Our house is not much in some people's books. We could 'afford' a much better home and could, if we wanted to spend our savings, have the 5 acres out of town. But at the end of the day, this is the home where my children were born. It holds our family memories. It is the place that I am so happy to return to when I get home from work. I don't need to impress anyone with my wealth or make out that I am richer than I appear. I don't feel inclined to keep up with the Jones'.

I blame television and advertising for a lot of what is wrong with our lives today. I call it the 'marketing devil'. From advertisers there is a constant message - "go on, you deserve it !" ( said with satanical voice) " you work hard, you know you need it" " think about yourself". etc

It began in the 1950s when they started telling women that they had more 'important' things to do than be stuck in the kitchen, cooking meals for the family! Things have gone down hill rapidly from there until we are told ' buy now, don't worry about paying, you deserve it, pay it back in four years time, you work hard, you deserve it, you want it, you need it, GO ON, life is short" unfortunately for some, life at 28% interest is somewhat longer than they had envisaged!

Anyway....... I'll get down off the soap box now. Epicurus, the Greek philosopher thought that we were after three main things in life...... Good food, Good friends and an analysed free life. When we see advertising portraying a group of people escaping for the weekend in a brand new car, we actually want the friendships and freedom, so we buy the car. Have a look at these elements in advertising and you will soon be a wake up to their ploy . We buy products when what we really want is the lifestyle that goes with them. If you limit yours and your children's exposure to advertising, you don't get bombarded with that feeling that you are missing out, or can't keep up or are inadequate and need to fix the problem.

I stand by my position that if it wasn't for credit cards and mortgage redraw facilities we would be in a 1930s style depression. How would you and your family go if you had to work off cash only. Could you do it ? I find it works for us... and most of all it brings tremendous peace !
Let me know what you think.

12 comments:

Anonymous said...

I watched this too. WOW I was amazed. I don't think the banks are entirely to blame but on the other hand I don't think it's all the borrowers fault either. It must be very scary for some people, I couldn't sleep at night with those kind of debts hanging over my head. Imagine borrowing to buy then a few years later finding your home valued at only half what you paid? Even if you sold you wouldn't cover your debts.
I totally agree with you re advertising, they do try to sell us a life style. How did we get to be so easily bluffed?
As for cash only, we live by that rule. When we do use credit cards they are always paid in full before any interest is charged. We do have a mortgage but only tiny, it seems, compared to many. When I was growing up my parents always said, 'if you can't afford it this week, you won't be able to afford it next week.' which meant save up for it. I still follow that rule. I'm not old either only 39.

cheers Lenny

Still at Home said...

I watched this and was appalled. Financial institutions acting badly, people making unwise choices. The couple looked young and the house looked very grand. It was all very sad.

jan m said...

I agree with you that advertising is much to blame. One of my teachers in junior high school taught a course on advertising, and it showed us that no matter what was promoted, they were simply playing on your emotions to get you to spend money.
I also agree about the woman's role in the family. We were expected to give up the best job in the world (raising your own family) to go out and seek better "things" for them, through employment.

libby said...

Great post. I haven't watched the show but will do later. You've certainly given me a lot to think about. We don't watch commerical TV, which I'm thankful for. My dh has a very good income and we do tend to spend everything we earn but we pay off our credit card in full each month and our only debt is our mortgage. Having said that I do use the credit card a bit freely but have been reluctant to go to cash (cause we use the frequent flyer points we earn to go overseas). BUT now you've got me thinking....

gary said...

We watched 'Debtland' too. I tend to think it's shared responsibility/culpability. People seem willing to live beyond their means - and financial institutions are happy to support and encourage that.

As you suggest, part of the issue is the sheer size of houses these days - and the cost that adds to property values; plus people believing the advertising. Our family talks back to TV ads telling them we don't believe their lies.

Regards, Gary

han_ysic said...

Just read the script as the footage wouldn't load. I used to work in furniture and feel bad now after reading the issues with GE, who our finance was with. I actually walked away from my job as I became disillusioned with it, although good at selling, and started doing community work and working with children, which was more stressful but brought more peace.

Tracy said...

I haven't watched the show but it seems to be a common story in the media lately and is quite sad. I do think though that most people want someone else to blame for some of their decisions that they later regret. I too am happy to say I don't have a mortgage and that ws only possible by living below our means and starting out small rather than having the best house in the street.

Country Girl said...

Just stopping by, enjoyed your site. I plan to take a peek at your movie you have posted.

Em said...

I missed that program, but can imagine what it was like; people living beyond their means seems a common story these days. The finance industry is fairly heavily regulated in Aus (which is great) so I'm not sure what more can be done to "protect" people from themselves... maybe educating young people in schools about advertising and budgeting? Altho the RE industry could really take some reining in - buyer beware allows all sorts of things to happen.

Personally, I'd love to see advertising curtailed; we don't get a lot of exposure to it b/c we don't watch much tv, but I notice how tuned into advertising my children are already. So we talk about what "they" are trying to sell us, and talk about the real cost of things - rather than labelling something good or bad, thinking critically about the choices.

Gavin said...

Here, here. I agree with you 100%. Too many people in way over their heads, too many McMansions, and too many people trying to impress people they don't really like. For me, it is all about family, and the love and happiness, and living within your means. I still have a modest mortgage, but will have it paid off in 10 years. Work to live, not live to Work is my motto.

Regards, Gavin

Robbyn said...

What a great post!

We love your blog and are really sorry it's taken us so long to add you to our blogroll...we did in a recent post at our site; hope that's ok!

Jill said...

What a great post. I am back in Fiji just now, so didn't see the show, but saw an article, either on "The West" or "Perth Now" website about middle class people having to make sacrifices, like giving up luxury food, holidays, concert tickets etc, although going out for dinner apparently was at the bottom of the list! Gosh, imagine what people who remember living with rations during WW2 would think of that !!

It is hard though for young ones starting out with the price of real estate, my daughter Nic, 21, really wants to get a little place of her own, but the cheapest we can find in Perth that is halfway decent, is a 2 bedroom flat for about $270,000, even if you take a third of for government shared equity scheme, and $7000 off for first home buyer grant, she would still face mortage payments of nearly $400/week!

She wants a 2 bedroom so she can rent a room out to one of her friends!! Hopefully she will meet someone one day who shares her vision, and between the two of them they will make it happen, in the meantime, what age do they say kids move out now ??? LOL