The Grasshopper, the Ant, and 1.9 million Australians

The Grasshopper, the Ant, and 1.9 million Australians

Vanessa Stoykov

When I read the statistics from an ASIC report that said around 1.9 million people, or 1 in 6 Aussies, were in over their heads with credit card debt, the number surprised me. Not that people were in debt, but the sheer scale of it – Aussies are in $45 billion dollars of credit card debt.

That’s a lot of money. And its seems that the easy access to credit has been no friend to a lot of people, myself included in my 20s and 30s, in this world of instant gratification.

But how can you blame people for wanting more?

Some would argue that spending money you don’t have is not responsible. Yet aren’t we bombarded with images on social media day and night of people living their dreams? Why shouldn’t we all want a bit of that for ourselves?

As the saying goes “the bill always comes due.”

The Royal Commission continues to exposes practices from credit providers that show that people are using the wrong products, and could have saved by understanding their options better (in fact the ASIC report stated that consumers could have saved $621million in a single year by switching to a more appropriate credit card). It’s time to take stock and take responsibility.

A host of complex and hard to understand products, combined with low levels of education or engagement has meant people are creating future problems for themselves that they are yet to come to fruition, while institutions have reaped the reward.

Financial services organisations have to be better communicators and design products in the interest of consumers – that much is obvious from this Royal Commission.

But there needs to be co-responsibility from everyone else. People owe it to themselves and the next generation to look at what their ill-informed spending behaviour is creating.

This is not a new problem.

A Greek slave and storyteller was warning people of the very same thing with his fables and stories all the way back in 620 BC.

The Grasshopper and the Ant was a classic story of the fun loving grasshopper, who enjoyed himself all summer, sun baking, eating and having a good time, while the industrious ants busily worked hard every day, moving and storing food in their nest.

While the grasshopper thought that was a boring way to live, and taunted the ants for their funless and hard-working lifestyle, it was he who ended up regretting his frivolous ways. Winter came and he starved – dying while the ants survived through the product of their preparation and hard work.

While I am not exactly saying 1.9 million of us are grasshoppers, there is something to say for being prepared to survive a downturn or a winter.

There are a lot of people exposed financially in Australia at the moment. While I hope and pray that summer lasts in this country as long as it can, to borrow from Game of Thrones – Winter is Coming. It is inevitable.

We can see the warning signals clearer than ever before.  For those who have prepared for winter – well done and congratulations. It is clear you have made sacrifices. For those who have yet to start preparation, I urge, make haste. Gather as much as you can, before the harder times hit.

I for one will be working hard to make communications and education easier to access and to understand about financial services. We have a way to go.

Until next time,

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