Bad Credit Habits learned from the Elders

I realized that one of the minor points that Robert Kiyosaki mentioned in his Rich Dad book is to avoid credit card debt.  I was feeling a bit puzzled why he mentioned that and not those other debts like personal loan, business loan etc. 

That is until I begin to see reports and reports of how people all over the world are abusing credit card and incurring hugh amont of debt as a result of it’s high interest rate.

More surprising to me, people are not aware of the high interest rate of credit card and unbelievably, there are even those who have the wrong idea that credit card need not be repaid at all!  Shocking!

In England, a report confirm this trend in the younger generation and attributed this to the bad credit habits the older generation, which got passed to the next generation.

Following is an extract from the report: Young and Old

Following a report into the borrowing beliefs of teenagers, an investment expert has said that children should be educated and not bullied into saving money if they are to avoid a life of bad debt.

Ben Yearsley, from Hargreaves Lansdown, said that the young people’s lax attitude towards spending and debt is probably a reflection of their parents’ habits.

His comments follow a survey from the Personal Finance Education Group (pfeg) that found the majority of teenagers in England have been or are in debt by the time they are 17-years-old and have a “worryingly laidback” approach to money.

Mr Yearsley said that the 1.25 trillion of personal debt among the adult population is a bad example to children, a fact that parents “need to think about” before making their children behave more responsibly.

“I don’t think it is necessarily about forcing children to save it’s educating and teaching them about what is going to be needed later in life,” he said.

One of the most significant findings of the pfeg survey is that some teenagers think that credit card credit debt does not need to be repaid at all.

Experts are concerned that a lack of understanding on such matters will lead to a rise in individual voluntary arrangements and bankruptcies, which will impact on people’s ability to borrow credit in the future.

Seems like a case of “like father, like son”.  Your children financial behaviour will be a reflection of your financial habits. So how is your financial habits and what financial habits do you want your children to have?