Financial life skills
A few months ago, I had a long conversation with a brilliant, beautiful 20-year-old young woman. Thinking about her always makes me feel a bit sad, because she’s been blessed with tremendous artistic talent, optimism and charm — but is working in a low-wage, dead end job because it isn’t possible for her to attend college. Part of the reason is that she can’t live with her parents (long story) and they’re not willing to provide her with financial support of any kind to get her through a post-secondary education. But — were it not for another factor I’ll get to in a moment — she could get student loans and go to the art school she has her heart set on. (She would make a terrific graphic designer, so please don’t get hung up on the ‘you can’t make a living with an art school education’ thing.)
Here’s the rub. She has a $2,000 credit card debt, largely the result of buying clothes she couldn’t afford in order to look stylish at her nowhere job. She’s been late with payments, so her credit rating is ruined — and she shouldn’t have had a credit rating in the first place, because her earnings are so low she can barely afford shared rent (she rents what is essentially a closet by the furnace at a friend’s house) and her other basic expenses. When her payments are on time, she pays only the minimum, and the interest rate is so high that the total balance is never reduced.
I am interested in your views: what would you advise her to do?
I am terribly disheartened by the situation — credit card (and payroll loan!) companies who grant high interest credit to minimum wage workers, how do you live with yourselves? And why, in such a rich society, are the people who need post-secondary education so often shut out of our colleges and universities? And why is it so difficult to arm our children with basic financial life skills?
But I did not begin this post in order to rant. Here is some help with at least one of those tragic gaps, an education site that helps prepare youth for the financial issues and challenges they’ll face once they’ll leave the nest. The BC Securities Commission offers Planning 10 — it is my fervent hope that it will save young people from the cancer of debt they cannot afford.