Slavery represents one of the oldest models of ownership. To be a slave is to be under the dominion of another person or entity. This can take many forms and happen for a number of reasons. While slavery in its most known type has been abolished in countries the world over across the past several centuries, there remains what I call the Modern Day Slave.
The Modern Day Slave is anyone walking around paying the monthly minimums on their credit cards. They are willing to pay outrageous rates of 19% and beyond for the shallow convenience of a consumer-driven lifestyle. The Modern Day Slave finances everything just to fit in with the people around them; their stove, their fridge, their television, their cell phone, their vehicle – quite literally every significant item and many smaller ones. Living in this fashion is just as grim a thought as sitting in a room with shackles on.
The modern day slave is held in place by a powerful force we have come to know as “credit”. Credit is easy to obtain and even easier to use. The problem is the behaviour that develops from a lifetime of accessing easy credit.
Instant Gratification
The desire for instant gratification is primal. It is present in all animals that lack the ability of foresight. To rise above the class of Modern Day Slave, it is necessary to go from a life of instant gratification to one of deferred gratification. Being able to plan ahead and save accordingly is ultimately what it takes to free oneself from the clutches of the megacorporations that devote billions of dollars to marketing their products to the unwitting consumer.
Credit controls the uneducated masses, telling them where they can and cannot live and what they can and cannot do. Credit will micromanage and control your life if you misuse or abuse it. When I say the “uneducated masses”, I am referring to any and all men and women whom lack financial knowledge. The wondrous thing about credit is that it can make a poor man look rich and a rich man go broke. Without proper planning and control we are all susceptible to the wrath of credit.
On the other hand credit and the financial system may lift up and reward the people who learn to use them wisely. Mastering this area of finance is something everyone should strive for. Credit cards are great for collecting points or cash back rewards. When properly used, we the consumer can win; when we understand the pros and cons to proper credit management.
Consider this riddle of modern consumer finance: You need to have everything in order including pay slips, bank statements, loan statements, and other such documents to secure a loan whereas financial institutions literally send out preapproved credit card applications in the mail to people who never even asked for them. On one hand rigorous documentation is required for a loan and on the other hand they’re handing out credit like candy.
The financial institutions don’t care how you spend the credit. The only thing they want is their payment on time every month – and rightfully so. Always remember that the only way to really win at this game is to not play.
Financial Education
Due to the lack of proper financial training in our lower and middle school system: •Our young adults are easy prey for the money lenders and/or creditors who are comfortably poised to financially farm the entrances at our colleges and universities. •Average families run into problems using credit cards to manage their lives and live beyond their means; eventually leading to maxing out credit cards. As those young children who learned poor habits and were never taught how to manage credit grow up, they become the cattle for the financial dairy farmers.
If debt was such a controversial issue across North America, you would assume our educational institutions would take a more proactive approach and install actual and independent financial classes for all children starting from first grade. Financial literacy education should not be glossed over and yet here we are with an education system that all but entirely ignores it.
The common line in schools is this: “Get a good education so you can get a good job and make good money.” The problem is that the school system doesn’t educate the students as to how to manage that good money once they get it! Even the basics of balancing a budget remain uncovered in the vast majority of public schools. Perhaps their mantra should instead be the age-old, “You’ll owe, you’ll owe, it’s to work you’ll go.” That seems to be in line with the reality.
Financial literacy is part of the elementary and secondary curriculum in many different subjects such as mathematics, social studies, Canadian and World studies, business studies and many others. In some subjects, students may be learning specific skills such as understanding money, consumer awareness, personal finances, budgeting and money management that will help them develop financial literacy skills. In other subjects, financial literacy connections may be made as students learn about their place in the world, as a responsible and compassionate citizen or when they study different economic systems.
Through the curriculum, students are developing skills in critical thinking, decision-making and problem solving that can be applied to subjects at school and to real life situations. Resources have been developed for teachers to help them connect financial literacy topics across the curriculum to deepen students’ learning and make financial literacy more relevant.
http://www.edu.gov.on.ca/eng/parents/financial.html
Mastering one’s finances and staying in control at all times is nothing short of an art form unto itself. It is a constant state of checks and balances. Financial literacy is one subject in our curriculum that is not getting the attention it so truly deserves. Then again, the system relies on having a ready crop of Modern Day Slaves ready to bear the burden of debt so the economy can continue expanding. Maybe if people understood the ills of debt and consumerism they would start questioning the “givens” in our society such as student debt, car loans, and other such traps.
The world we live in would look a lot different if all children were taught at an early age how to control a bank book (or online banking account), control their spending, and have a comfortable working knowledge of finances.
Your Future Is In Your Hands
For sustainable change in the overall financial wellbeing of average people, knowledge is the key. It is comfortable to discuss the failures of the government or school system in teaching proper financial etiquette, but at the end of the day the duty of securing your future falls to no one else but yourself.
I have been speaking as if “credit” was the antagonist of this post, but the only way credit can affect you is if you let it. You are in total control of your actions and spending habits. You are master of your destiny. No one can make you a Modern Day Slave. It is a position that requires only your desire for instant gratification and willingness to sign on the dotted line.
I realize some people reading this are in debt due to credit cards/student debt, etc.. If that is the case, then controlling your current debt is the most important part of securing your future. To admit you are or were once a part of the financially uneducated masses might be difficult at first, but it’s the first step on the road to recovery. Taking the Socratic approach by acknowledging first how little you know prepares you to then begin the journey to improving your life and taking charge of your finances.
Financial discipline can only be taught and explained to a point. Living with financial discipline as a core pillar of your daily life takes time and practice. Most people do not wake up one morning and find out they went bankrupt the day before. The road to financial ruin is often marked with many questionable decisions. It is up to you to know what a good or bad financial decision looks like no matter how big or small they appear to be. Taking on debt should always, always, be done reluctantly. In fact, if you can avoid it, you should avoid it.
If you are hemorrhaging funds from credit cards or other forms of debt, immediately start setting money aside to aggressively pay your debt off. Find ways to save money and keep moving forward at a sustainable pace towards true financial independence.
Rise out of the ranks of the Modern Day Slave and stake your claim on financial independence. Your future depends on it.
– Rick
Do you ever feel like a Modern Day Slave? What have you done to secure your financial independence?