5 Oct 2014
#SmartMoney | 5th Oct 2014
Thank goodness for the weekend, for waking late and for strong coffee.
This week the #SmartMoney has been talking about credit cards vs cash, financial smarts for kids, and the way university students are being sold down the river.
Let’s get into it.
On Wednesday Debt Debs invited us to choose between cash and credit cards and she’s had a great response to her post with comment numbers well into three figures: “Credit or Cash? Pick Your Poison”
Personally I don’t have an issue with credit cards as long as they are used properly, and by that I mean paying off the balance at the end of each month. Religiously.
But the banks aren’t stupid. They know we’re weak. And they know you’re a sucker for the shiny stuff… we all like the shiny, don’t we?
So, knowing that you’re weak, it’s up to you to be honest with yourself and to take responsibility for your own spending. If you’re disciplined enough to pay off the balance at the end of every month, then why not buy things on a credit card? With cash back offers, credit score advantages and free insurance on your purchases, you’d be a fool not to.
But if you’re like a kid in a candy store when you get the plastic in your sweaty little fist, maybe cash is your best option. As Debs points out,
“There’s no right or wrong answer, but there’s a right or wrong answer for you.”
That leads me neatly to the next post which caught my eye from Shannon Ryan at The Heavy Purse who talks about how we teach our kids to understand the value of money and to adopt responsible spending habits from an early age: Essential Money Skills Every Child Needs to Learn Before Leaving Home
It’s a topic I feel strongly about because the younger generation seem to be heading towards a lifetime of over-indebtedness (particularly when you consider the massive debts young students are now expected to take on in order to get a university education) and I think a lot of it could be avoided if we took time to consider the implications of the money we’re spending.
It’s a topic I covered briefly in my own piece recently: Credit Virgins.
Alex Proudfoot
From teaching kids about the value of money, we move on to a discussion about the way we’re selling high school students down the river by pushing them into higher education when, in many cases, it may not be the best thing for them: “Today’s University Students Are Being Sold A Lie” by Alex Proudfoot was an insightful, honest assessment and it hit the nail on the head for me. There are far too many teens heading to university thinking it’s the only route to a decent job, when in reality many would be better off finding work after school instead of studying a soft-option degree course to get a meaningless graduation certificate and then spend the rest of their working lives paying off student loans.
And finally, I discovered this hard-hitting piece by Laurie at The Frugal Farmer entitled “You Don’t Know Jack (And Neither Do I)” which sums up a lot of my own feelings about the “poor me” attitude and the sense of entitlement which seem so prevalent these days.
I can’t put it in better words than Laurie herself:
“Stop feeling sorry for yourself, stop wallowing in self-focus and arrogance, and start seeing your life for what it truly is: blessed. And never forget that, compared to the rest of the world, you’ve got it pretty damn good.”
Have a great week.
Myles Money
Latest posts by Myles Money (see all)
- A Life of Debt Slavery - April 14, 2015
- Financial Literacy in UK Schools - April 13, 2015
- Fukushima 2015 - March 9, 2015
October 6, 2014 @ 1:20 am
I put in my 2 cents on the cash/credit debate and I think most people would agree – as long as you can control your spending, credit is the way to go. Paying with cash is like throwing money away by not collecting reward points
Dan @ Our Big Fat Wallet recently posted…Weekend Reading – October 2, 2014
October 6, 2014 @ 9:10 am
I agree Dan, but how many of us manage to control our spending? I would be interested to see stats on the percentage of people who carry over money on their credit card at the end of every month. It all comes down to self-discipline of course, but for most people so is getting into debt in the first place… and look at all the PF bloggers who started their blogs because they found themselves in the middle of a debt nightmare.
October 6, 2014 @ 1:11 pm
I guess more than anything it’s about knowing yourself. I love credit cards because I know that I will NEVER not pay that balance on time, so I might as well benefit from the rewards and incentives.
Stefanie @ The Broke and Beautiful Life recently posted…Create Your Own Opportunities: Crowdfunding Effectively
October 6, 2014 @ 1:37 pm
Hi Stephanie. If you have the discipline to use credit cards properly, it makes perfect sense to take advantage of the rewards on offer: as Dan said, you’d be throwing money away if used cash.
October 7, 2014 @ 3:06 am
Thanks so much for mentioning my post. Although the initial comments were about 50% credit and 50% cash or debit, on my recent poll it’s running around 67% credit and 33% cash/debit. I still stand by my statement, everyone is different and you have to use what is appropriate for your situation. 🙂
debt debs recently posted…Debtity-do-da! – Debt Repayment Plans
October 7, 2014 @ 8:52 am
Two-to-one: that’s pretty conclusive. I wonder if the figures would be any different among the wider population — people without a strong interest in personal finance who are not as focussed on tackling their spending. And I wonder if they would justify the credit card spending the same way (to take advantage of the benefits on offer) or if they use them out of convenience, or because they can’t afford to pay cash. It would be interesting to see figures for how many people have a rolling balance on their credit cards, wouldn’t it?