> We all know many people who are extremely sloppy with their personal finances, and sign up for things they can't afford, debt they are unlikely to pay back, etc.
You know I have heard this my entire life, and I have yet to actually meet any of these people. The people I have met though fall into one or more of a number of categories:
- People uneducated in finance, usually lower class: You can say things like "well of course credit cards charge interest" but I was never taught that in school. I learned it from my mother, who is an accountant. She also taught me how to do things like a proper budget, balance a checkbook, diligent record-keeping on expenditures, and how to file my taxes. I was never offered this knowledge in schooling. The gap between how many, I believe well intention-ed and well educated people have between what is "common sense" financial knowledge and what is known by common people, can be the grand fucking canyon.
- Despite the above, I have also never in my life met a person who believed a credit card was free money. Everyone knew they had to pay it back, even if they didn't understand interest and why interest was about to ruin their credit score.
- Additionally, I have never met a person who signed up for things they couldn't afford for the hell of it. I met a few people who were sold mortgages they couldn't afford, by representatives of financial institutions. I've also met people who borrowed money from Payday loan stores because their cars were broken and they could not earn money until that was solved, and they lacked the money to accomplish that.
- I've also met people who, before they were legally allowed to DRINK, were allowed to sign on the dotted line for six figures of educational funding, with no demonstration of understanding how the critical above concepts worked, so they could know what they would eventually pay, nor any demonstration of how they would earn enough of a living afterwards to pay it off, which is just odd to me? Like, a bank won't loan you $500k to buy a house that's only worth $100k, so why will they loan you $150k to get a degree in underwater basket weaving?
- Lastly, I've also met people who struggle with things like depression, addiction, attention issues, all manner of ailments that either stem from or are made worse by a lack of dopamine in their brains, which makes them impulsive and possibly reckless depending on the day, and I have seen them interacting with products that are clearly, blatantly, preying on their inability to say no effectively so that they will say yes. And once they say yes enough times, their credit cards are maxed out, and they're in the poorhouse for no other reason than being vulnerable to manipulation.
And like, all of that aside, even if you meet NONE of those categories, I still, frankly, believe it's not only possible but the only ethical response to all of this is: we should have a society that leaves enough room for people to fuck up occasionally without ruining their goddamn lives. I don't know exactly how we go about that, in finance especially this is a tricky thing, but at the same time, I simply don't believe that a lifetime of wage-slave-serfdom, or perhaps worse, freezing to death on the street, is an acceptable punishment for you making a bad financial decision at some point in your life. That does not make sense to me.