My father was of the old school philosophy, “save money for what you want, never go into debt.” He lived his life the way his Norwegian-born parents had. Trust, and a shake of the hand, represented a promise – a deal.
Even later in life he was suspicious of credit cards. When we introduced him to a cash card to supply his needs while in the care home, he practiced using it. Went to the bank across the street, lined up to the teller’s booth and took out $5 or $10 at a time. And did that daily to be reassured the magical card still worked!
The only time that I remember Dad and I having a serious difference of opinion was when I asked him to sign a loan for me to travel to Europe for the summer. It was after my university graduation and before I would return in the fall for a year of teacher training. I knew after that I would be employed, and not free enough for extended travel. He understood my reasons but they did not sway him. In desperation, I turned to his brother for a loan signature, where I held an account at the local Credit Union. My uncle had done some travel and knew its benefits.
So it is that with the exception of a home mortgage and two credit cards, paid in full monthly, I try to live by my dad’s rule. The happiest day of our early married life was when we ceremoniously ‘burned the mortgage.’
The economists and professional financial advisers I read, and listen to, say we could be entering an uncertain period of decline, not unlike 2008, with even the possibility of a WW#3 on the horizon. Many advisors say this is a time when holding cash is the best approach, certainly until the market shows its direction more clearly.
This brings me to my thoughts as I contemplate promises of the various national leaders, and their local candidates. The benefits some of them propose to give me, with borrowed funds from my taxes, could mean a debt that is impossible to repay. Think Greece. I watch world news too. It will be a drain on the country for many years, especially if interest rates rise. My young kids’ savings accounts benefited from 18% GICs. Maybe our candidates are too young to remember those days.
By now Dad would have been apoplectic!