The Saskatchewan Ministry of Education encourages the teaching Financial Literacy.
An excellent idea! Whether it will change human behaviour is another question.
Financial Literacy Lesson
Do not go into debt. Pay off credit card balance every month. Save 10% of your Income – Invest Savings into Term Deposits, Bonds and/or safe, Dividend Paying Stocks and use compound interest to your advantage.
What is Debt?
It’s an obligation to repay someone for something received. Debt can be s serious problem.
Some Debt is necessary. Buying a house requires Debt. The problem starts when people go into Debt because they want something they cannot afford.
Once you are in Debt the Debt Holder controls your life. Paying interest on the Debt means the Debtor is unable to save 10% to invest. The hole gets deeper.
400 years-ago William Shakespeare Wrote About Debt and Financial Literacy
Hamlet by William Shakespeare, Act I, Scene 3
Polonius was the Chief Counsellor at Court and the father of Laertes and Ophelia. Hamlet describes him as a “tedious old fool.” He is accidentally stabbed to death by Hamlet.
(I don’t know the Play well, but it is a typical, dysfunctional Shakespearean family.)
Regardless of his shortcomings, Polonius’ financial advice to his son Laertes is excellent and valid today.
Polonius tells his son to live life without Debt. He says, “Neither a borrower nor a lender be”, a phase often repeated.
What Polonius means, don’t go into debt, save and don’t lend money to your friends. If you lend to friends and they don’t pay you back, you lose your money and your friends.
Polonius also adds that his son should dress respectable but not to over spend on clothes.
The Merchant of Venice, By William Shakespeare
The central theme of the Merchant of Venice is Debt. In short, a Dude named Antonio is impressed by his friend Bassanio who seems to have a way with the ladies. Antonio wants to learn from Bassanio.
Bassanio is currently trying to impress a lady named Portia, the rich heiress of Belmont and pretends to be wealthy himself. He isn’t. He’s a hustler. Bassanio talks innocent Antonio into co-signing a loan for him with a Loan Shark.
Bassanio doesn’t repay the load and the Loan Shark comes after Antonio, thus, the conflict.
The Bible
Bible Scholars also find examples that describe the danger of borrowing and going into debt.
Cost of Credit Card Debt – The Most Common
According to the ‘Forbes Advisor’ the average credit card interest rate in August 2023 was 22.77%
Consider this Example:
Amount owed on a Credit Card is $7500.00 at 20% Interest – Just that $7,500.00, paid back at $150.00 per month, will take 106 months to pay off – almost 9 years.
Total Interest Paid on the Debt of $7,500.00 = $8,254.00.
How to Get Out of Debt?
19th Century Scottish Philosopher Thomas Carlyle (1795 to 1881) had the answer:
“Increase of industry in raising income, increase of thrift in laying out.” In other words, get an extra job and don’t spend so much.
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
