Money for Life, Life for Money
By Lee Young-min
Recently, many people committed suicides because they could not payback the debt. Many of those were aroused through the cash loan service of the credit card.
Credit card is a convenient tool that we can buy something without carrying the money itself. It is safe because we don't need to carry cash. It is convenient that all of the department stores and most of the restaurants accept the credit card. It is a way of buying first and paying back later. For the last couple of years, Samsung Card, LG Card, and several other credit card companies achieved unprecedented record in sales increase. Profits also broke the record.
However, we may overspend the money because the relationship between the money and the ability to pay back the credit is not so strong. Especially, young guys spend first and think about paying back later.
Also, credit card companies had focused on the marketing of cash service after a few companies were prohibited from issuing cards to new members. So many advertisements all the time allude us to spend money and there will be more and more advertisements.
Basically, we are not trained well on how to spend money. Many of young people are accustomed to spend money and the money is paid back by their parents. We need to be trained on spending money while we are young.
Let's teach and learn how to spend money.
Let's teach young kids on spending money and avoiding impulse buying. Teach how to stick on plans about money spending. It needs a practice. Especially, parents needs to do something to teach their kids while they are young how to spend money and how to save money.
We need to spend the money up to the point where we can pay back. Various advertisements prohibit us from saving money and lead us spending money. We see advertisements from when we are off the bed in the morning and until we go to bed. It's getting more difficult for us to avoid spending money. Advertisement has a psychological effect on us, customers.
We need to set the limit for the money we can spend a month. This is different from the credit limit the credit company set for us. Sometimes we are confused own individual credit limit with the credit limit the company set. The amount of money we spend should be a portion of the money we earn. The ratio of the money we spend to the money we earn different based on the age or the life style. I would like to recommend save more than 50% of the money you earn if you are twenties and not married.
We need to record the amount of money you spend everyday on your diary or housekeeping account book. This will remind you the limit you can spend for a certain period of time.
If you do have a special income that you don't expect then it is better you have a special plan for that income. But, you still need to keep the expense recording for ordinary expenses.
Let's enjoy own personal life and attitude.
We are too sensitive to other's behavior and attitude. We think all the time how to get what others have. Most of the times they are not essential to manage individual life. We are too sensitive to what others are doing and they are decorating for their bodies and so on. Where are we? Who we are? We need to ask questions to ourselves.
We need to understand that we are invaluable because we are unique in the world. We don't need to copy what the other people do and what they do. So many money and so much time are devoted to learn the information above. I agree, of course, that we live together and compare with others by instinct. However, we may keep what we are doing and what we have right now.
Well-known singers, movie stars are others not ourselves. We may give our attention to them but we don't have to devote ourselves to them. They are others.
What to do if in trouble
What should I do if I am in trouble with credit card. First of all, we need to understand the situation that is somewhat difficult to endure. There should be a lot of phone calls for clearing the credit which is overdue. It is also unpleasant to have a bad credit history in the future.
But, we need to solve the problem in smart way. It is worse to go to day-to-day loan service. The interest rate is so high that it may leads you to a miserable situation soon. So, make it public. Then find a helper who may be your parents or friends with jobs. Then you may go to an authorized bank which has a special service to credit problems such as you have. Usually, they ask a guarantor for changing your credit loan to monthly payment loan.
We see so many bad cases related to credit card use. The point is not make the problem worse. You can recover from the credit card itself problem although it is not easy. However, you may not recover from the credit card related crime if you committed it for a temporary relief.
The writer is a professor in the Dept. of Management.
Lee Young-min email@example.com
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