Play now, pay later

Play now, pay later

As the summer draws to a close and families that spent their time overseas make their way back to the Kingdom, some heads of households might be dreading the credit card bills that are sure to arrive at their door before too long.

While the global economic downturn of recent times has not gone unnoticed and has had its impact regionally to an extent, many of us trapped in past habits of spending more than we earn have simply not learned our lessons well. Money management and financial prudence are lacking among many families who run out of funds well before the next paycheck and tide that period over with borrowed funds.

Some of those borrowed funds are occasionally spent on unnecessary items such as vacations or other goods that are long forgotten while the debt remains to be settled. Banks are notorious for snaring customers with the promise of easy money through the facilities provided by credit cards. Unfortunately, many customers lack prudence in using them.

Credit marketing has grown significantly in the past decade in the region awash with petrodollars. Unfortunately, it has turned more into an exploitation of most salaried individuals who are lured by the quick and easy ways to acquire just about everything, and more often than not on items they can do without. In their quest to sign up anybody with a monthly income, our banks and lending institutions may have failed to serve regional societies in a responsible manner.

Our society had operated for decades under the “pay as you play” concept. If you didn’t have the money, then you either had to forget about it or else set aside something monthly until you collected the full balance before you could acquire the goods. Or gather up enough courage to go borrow from a family member. And you had better have a good reason for your need. There was no easy money for quick access to material things that in some cases were not a necessity.

But in competing with the rest of the world, our lenders have in recent years made it possible for one to practically hock away his future for all things desirable. Credit is well and good used wisely. But the growing number of those complaining of the monthly credit squeeze indicates that “easy money” is taking its toll.

And it’s not just banks. Almost any major retail establishment you visit has set up or contracted credit facilitating agencies to ensure that you do not leave their store without purchasing the newest and biggest items on the block; and once again with stuff you really could do without. If one seriously believes that the product would make one bigger or better, then that suggests another set of problems.

What makes it more alarming is that credit issues and defaults are on the rise and are garnering social awareness. With parents themselves caught in the debt-trap, one would have thought that the hope for their young in understanding and respecting fiscal discretion could be found in schools.

And yet our educational institutions do not seem to feel that they need to prepare the fast-growing youth population of this country to be credit savvy. How much financial prudence is a child exposed to as he goes through his school years? There are no classes in our school curriculum that I know of that help children understand the value of simple budgeting.

In some countries, companies offer credit management counseling to debt-strapped families and help those in a credit crunch with steps to work themselves out of trouble for a small fee. With such businesses lacking here, it is often left to the heads of households to face their demons and that takes a toll on the structure of the family.

If there is any lesson to be learned, it is that in our desire to play today, we should make certain that we do so with our own money. Otherwise, we are going to be in for a long and unpleasant ride tomorrow.

The author can be reached at Follow him on Twitter @talmaeena