Most people I speak to are guaranteed to struggle with too shames of finance 1.Paying bills late 2.Spending more than they have aka debt.
But why do so many in today’s society struggle with these two shames? Quit simply, because it is not directly their own fault, it is the blame of a dysfunctional financial society.
We live in a society where the culture and way we are socialised is an impossible equation to live up to as listed below:
Expectations of our socialisation:
- We are expected to pay all bills on time
- We are expected to purchase all we need to live rather than grow, build or make it ourselves.
- We are encouraged to purchase what we don’t need and get it when it’s new or be left behind
- We are socialised to own what our peers own
- We are encouraged to take on debt
- We are lawfully obliged to purchase things like Insurance
- We are encouraged to fear all negative aspects of our society and protect ourselves from it i.e. alarms
- We are encouraged to pay for further education with loans to get good jobs
- We are encouraged to travel further distances for better pay
- We are encouraged that we need mod cons in order to save our time i.e. dishwashers
- We have only 2 energy choices gas and electric, we are encouraged to rely on equipment that uses those energies.
- We are at the mercy of the cost of food and energy companies, insurance companies and financial institutes.
- We are expected to provide for those we love the latest gadgets including the internet, extra curriculum activities to meet your child’s needs by government standards rather than financial abilities.
If we look at this cycle more closely we will see just how dysfunctional this cycle is and the fact it leaves the majority of the population born into it and at its mercy.
Firstly you are born into a country, you don’t choose to live there so you are also socialized to meet its expectations, secondly we are born to parents already meeting the expectations of that society, however those parents are usually burdened by those same social commitments. Then we take the expectations that while at school you are there to get a good education to get a good job, however that education can not get you a good job it can only get you into further education and further education costs money here is your first meeting with debt. alternatively you can choose not go into higher education and avoid the debt of further studying perhaps joining the income step-ladder at the bottom, earning just enough to by a car or learn to drive, perhaps going out at the weekend and drinking your earnings away until you find that you need a mortgage or take on rent. Then you realise how much else you need to support that independent lifestyle, i.e, decorating because an English man’s home is his castle, so now you are running a car and a house and still you are told that you must purchase the latest gadgets yet having no money for those gadgets you take on dept you can never pay off or are late paying those bills you are told by society you must not be late paying.
Now back to the further education route, you finish education with a huge debt after being sold the expectation of getting a great job with great wages only to find out that only 25% of Uni graduates end up in a job relating to that degree and the pay that comes with it so you end up working alongside the school lever that worked his way into the same position you studied your way into except he has no student debt he has other debts instead, then you realise that the debt that he has you are only at the beginning of taking on while he is half way through paying for it all i.e. rent/mortgage bills etc.
You have kids and the government tells you that to be a good parent and help your children thrive you must keep throwing money at them in the form of a good education, extra activities such as karate or dance classes, all the latest gadgets and clothes, the best food and regular holidays at twice the cost because they can only holiday in the school holidays when holidays cost twice the price. You must help your children to achieve or you are failing them in achieving all that you have achieved so far which is only seen as debt.
Now we look at the end of the road where we can retire:
After working for all of those years you finally pay off your mortgage and you can retire living on the money from your investment “the house” only to realise that you can’t actually sell your house because you need to live in it but that is ok because you will have that extra £800 a month you are saving on no longer paying a mortgage only to realise that will only last for a year because you are that near retirement and then your work income stops. Then you retire and have to survive on your private pension and state pension if all went to plan, finding out that you no longer have a good income yet you are expected to spend into your retirement years because these are the years you had been working towards yet not having enough money to achieve the dream of retirement. Then you need care and have to sell your house to pay for care then you die and your children are taxed on what’s left over after you already paying taxes on your income over the last 50 years.
And so the cycle continues as we pass it on to our children and they on to their children. How can this not be a dysfunctional financial system? The point of any functional financial system each generation should be in a better position than the last because they should inherit the profit of the last generation and so on. We can not blame the recession because this system predates this recession and the last yet we are stuck in this financially dysfunctional cycle.
Something has to change!