Our high schools and colleges are doing a terrible job of preparing students for their place in the world. Required courses in basic math and personal finance could do a great deal of good.
There are basic guidelines for the amount of debt you can owe. Lodging and other monthly payments should not exceed 40 percent of your net income. This leaves the rest of your disposable income for food, gas, insurance, utilities and savings. This means you can’t live in a mansion and drive a new car unless your income warrants.
You can’t put living expenses that you should be paying cash for on credit cards, such as gas, food, utilities and entertainment. Some of these wonderful credit card companies will keep increasing your line of credit as bait so you will wind up with a nice balance and paying them lots of finance charges.
Unfortunately some professional credit grantors talk customers into credit they cannot afford. Then after years of putting marginal or bad credit on the books, hurting consumers, these businesses find that not only will their high interest rates not support the credit operation, but they come to the taxpayers for bailouts.
William S. Thompson