Just before we moved back to the City, I went with Dylan to the bank to renew his Everyday Access card. It must have been the Manager's 'Day to mingle among the people' because he personally took charge and led us to one of the small partitioned alcoves lining the sides of the long room.

We all sat. Dylan had just turned seventeen.

"Here's what I'm going to do for you, young man," the Manager said, with the broadest of smiles. "I'm going to renew your Everyday Card but I'm also going to link a debit MasterCard to your account. That way you can buy things online by yourself and not have to use your mum's credit card. Does that sound cool?"

I didn't have a 'credit card'. I had a debit MasterCard the three of us used on and offline, transferring funds into it as needed. I'd had - in the distant past - at least three credit cards including American Express but I'd torn them up once I'd understood their 'debt into perpetuity' assumption. I keep receiving them unsolicited in the mail every few years since, like I've re-appeared in someone's radar as one not in possession? "Here's 5K, knock yourself out." "Here's another 6K, imagine what you could do with it!"

I have some not-so-fond memories of occasions when the monthly statements caused palpitations, much shaking of the head, and "Did I really need all this stuff?" questioning. In the moment, it had felt so convenient: Buy now, pay later. Worry about it later, just have the fun now!

Well the subsequent worry sometimes cancelled out the in-the-moment-fun, because the 'later' wasn't as bright financially as I'd envisioned. So I'd pay the 'minimum' due, $340 in interest for the month on a single card, say. Interest! Not a dint into the actual 'spent' amount. After several months of this, suspiciously adding up the monthly minimums on each card, I accepted the 'in perpetuity' aspect. They didn't want their money back. Ever! They were only interested in this 'monthly minimum' I kept handing over, for the privilege of enjoying the moments and paying for them later.

So I had rid myself of the privilege. And yes, I had discussed it with the boys, as I'd opened yet another invitation to the "Visa Experience". I'd specifically mentioned the year I had paid over 7k in 'monthly minimums', the cards maxed out, of no use the entire year; only constant reminders of my stupidity...

..."Sure," Dylan replied. We waited the few minutes while he typed on various screens.

"Then, when you turn eighteen, we'll swap it for a real credit card, how does that sound?" He sat back after emphasizing those two words, as though better to receive the many oohs and aahs and the "Really, I get a credit card?" wonderment...

I in the meantime held my breath. Would he remember? Had anything I'd said 'sunk in'?

"What if I don't want one?"

A chorus of Hallelujahs reverberated in my brain. God I loved this kid!

The Manager? Not so much. Kudos to him though for hiding his failure to receive.

"You don't want a credit card? You know, in case of emergencies or if you need to buy something you can't afford just yet..."

"Nope."

"You do realise without a credit history, it will be harder to apply for... say a car loan later or..." We could see him trying to think up other examples relating to someone Dylan's age. "... Or a holiday? Lots of kids are going overseas when they finish school..."

"I don't want a loan to buy a car or anything else."

Hallelujah! Hallelujah! Hallelujah!

"You might need one at some point. Isn't it better to be prepared?" The 'suit' in the too-tight suit was persistent, I'll give him that.

He turned to me next! "Credit cards also teach your children to be responsible with their money. They'll learn how to spend wisely and to repay their debt on time." He sat back smiling again, hands steepled thumbs upward, resting on his patent leather belt. Surely I as a parent would see the benefit?

Oh he was way out on a limb with this one! I so wanted to butt in and ask him whether the bank would be understanding if my kid took a while to get used to being responsible... Like six months?

But he'd stumbled across the wrong kid anyway.

"No thank you." Dylan said, answering on my behalf, as I returned the smile with just a touch of malice.

I could feel the Manager's sudden and just-below-the-surface disdain: "You think you're so smart now, but we'll get you, don't you worry kid! No one escapes debt."

See, I'd also had that other talk with both boys one day. The assets vs. liabilities talk. They were involved in some local charity work and part of it entailed creating a business plan which included the financial projections and balance sheets. 

I'd run them through the whole 'what is an asset and what is a liability' gambit.

A car was not an asset, they'd discovered with much surprise. A loan for a holiday or any other 'deteriorating in value purchase' was not an asset. They had a fair idea by the end of the discussion: Assets gave you money, liabilities took your money away. (I did have to dredge up my old economics subjects and pad the discussion with considerable Googling...)

My son received his very first "Welcome to the World of Possibilities" MasterCard shortly after his 18th birthday a few weeks ago. He promptly declined the welcome and tore the letter up.

...Coincidently, one of Dylan's mates stayed with us for a few days last week. He is a couple of months older than my son and goes to trade school, working part time as a motor mechanic. He'd just taken out a $15,000 loan to buy his first car. He wanted something reliable, that would "last him a few years".

I was horrified when Dylan told me. Where were his parents? I'd met his mum, she was a nurse. His father lived up North. Why had they not spoken to him?

"Mum what's the total repayment on fifteen grand?"

"Find a loan repayment calculator. Then multiply it over ten years. Personal Loan, got it?"

Dylan came back a while later clutching a piece of paper - and clearly as disturbed as I was.

"Boyd told me he took a fixed rate of 14%, right? I ran it through the loan repayment calculator like you said. He'll be paying $244 per month over ten years. That's $29,311, almost double what he borrowed!"

"Uh huh, if he maintains the loan for the entire period... And what happens to the $15,000 car?"

"Crap... that's going to be worth... maybe a couple of thousand by then?"

"Yep. Does he know this?"

"C'mon mum, it's Boyd. He's-"

Boyd is your average kid. Not interested in traditional education and a 'white collar' environment, he's opted for the tradie route. Dropped out of school at sixteen and sat around for a year then decided to become a motor mechanic. Nothing wrong with that, some mechanics make significantly more than others with degrees and stiff collars, stuck in cubicles. He's a good guy. He's just a little naïve when it comes to 'life'. Like I said, your average eighteen year old kid.  

"Has he signed the contract?"

"Yes! What do you think!"

"You couldn't talk him out of it?"

"He told me after he'd done it!" Dylan was clearly upset. "Mum, why don't they teach you this stuff in school?"

Seeing as I'd pulled him and his brother out just as they'd reached adolescence, I had no idea what schools were teaching these days... I let that one pass.

"What do you think he should have done?" This was always the best part, watching his brain evaluate and-

"Well he's going to be a qualified motor mechanic in another year right? So he knows about cars. What if he'd taken out a 5k loan, bought an old collectible car - as long as it was safe to drive - worked on it at the workshop in his spare time and flipped it over - like they do with houses - and then paid off the loan real quick and used whatever money was left to buy another collectible car without a loan and-"

Hallelujah! Hallelujah! Hallelujah!

"So in that same ten year period, he'd have made a tidy profit and ended up with a decent car and NO loan- you get it!"

"Duh!" He ganced at the paper again. "5k loan over 2 years is only an extra thousand in interest - I checked. He'd make a lot more profit on selling the first car."

He was almost out the door. Then he turned.

"I'm 18 now right? Remember I looked up what I could do when I turned 18? Like I could drive a car and drink and gamble... But then we had that thing with Centrelink and then VicRoads- and I know nothing about tax or how to save or how to fill in ANY forms, as you saw?"

"But you have Google. Surely you can look up-"

"That's not what I'm talking about. I can look everything up and learn as I go sure, but what about Boyd? He wouldn't think to do that. He's just screwed up big time. But he doesn't know he's screwed up see. He thinks he's doing the right thing!"

I thought back to the bank manager. The accepted notion that along with 'adulthood' comes debt; the conditioning of young people to accept debt in their future... I thought of all the kids Dylan's age already saddled with car loans and credit cards... Jess, who at twenty two had $32,000 owing on a car loan and two credit cards... She was a hairdresser. Not exactly an upwardly mobile occupation with scope for advancement and significant pay increases... She had a dream of one day opening her own salon. The dream would remain a dream for many a year...

...I gave Dylan $5,000 when he turned 18, ostensibly to buy himself his 'first car'. He accepted the money but refused to buy the car.

"I don't need one right now. The train stops right in the middle of Uni. It's a five minute walk home from the station. I want to open up a savings account."

We went to the bank. He linked a higher interest savings account (since his existing one paid .5% and the new one paid 3.1%,) to his Everyday one. As long as he contributed an amount into it every month and did not make a withdrawal during the same period, he would earn a much higher return in the savings account. He was pretty pleased with himself.

"Hon, you can make that money work harder for you."

"I'm not gambling in shares and stuff! Look at Apple! (Yeah, he keeps an eye out on tech shares...) I want to keep it in the bank. And I want to add to it every month, from my Youth Allowance."

This then led to a discussion about inflation. With saving interest rates so low, what little he'd gain over a few years would be 'eaten up' by this inflation. His 5k left untouched could in fact be worth less than what it was worth today. He wasn't happy to hear that.

"There's things called Term Deposits babe. You lock your money away say for six or twelve months and earn a little more interest? It's still in the bank..." (The interest on Term Deposits is only marginally better at around 3.4% at the moment.)

"Why didn't he tell me this?"

Oh I knew precisely why the smooth-haired over-friendly 'New Account and Investment Consultant' hadn't bothered exploring any investment options with my son. Dylan was too young. He was expected to 'use up' the amount he'd put away into that savings account, and front up all too soon for a 'loan' or a credit card! He had to tread the path see, and investment only came into play down the track, after he'd paid his dues in interest on the various loans thrust at him.

I explained the why to Dylan. Now he was both unhappy and unimpressed. "He's cheating me out of money!"

"You could say that... Then again there's this thing called 'Compound Interest'-"

"I know this one! You talked about it before. How I put say $50 away each week and I don't touch it for a zillion years and the interest is paid monthly rather that yearly which means you earn interest on the interest... I can retire with a decent sum one day, right?"

"Yeah, if you don't touch it and assuming nothing changes during that zillion years."

"Like?"

"Recession, global financial collapse, wars, hyper-inflation, currency devaluation, new currency change-over like the Euro - Come to think of it, this five thousand dollars could have bought you a decent house 40 years ago! Outright!"

"Stooop! My head hurts."

I couldn't blame him, could I? I'd just told him his $5,000 investment or 'nest egg' or whatever else he considered it, faced any amount of threat. Whether in the bank or out of it, the risk of- I think maybe he finally understood the 'real' value of money...

Lots of people (especially young couples and young families) are taking advantage of the low mortgage rates at the moment (funny how low interest on loans is reflected by low interest on savings and vice versa...) I wonder how many of them have factored in the eventual rise... little by little... I remember a time in the mid to late 80's when interest rates started rising until they soon hit 18%... Lots of tears and blood spilled then, as families once 'comfortable' lost everything and ended up homeless...

So I say to you as I did to my sons: Don't buy into the "You must have it now!" messages flashing around you. Ignore the credit cards so eagerly thrust into your hands. They're using compound interest against you, that's why 'minimum payments' may keep you in debt forever! It's not FREE money. You may well end up paying back ten times what you were given - in interest alone.

Learn the difference between an asset and a liability. Build up assets. Minimise liabilities.

Before you sign for that car loan, ask what the total amount to be re-payed will be. Allow for any amount of reasons why you might miss a repayment or two and lose that car, together with everything you'd have paid to date - and still owe for something you no longer have! Maybe that will make you pause enough to consider whether you really need the brand new model...

Debt is slavery. Enter it wisely and with full knowledge of your consent to this bondage...

...Yesterday we were doing some shopping... I started pointing out the many colourful % off stickers.

"Mum, that's another life-lesson right there! Write about it."