The Never-Never

I don’t pretend to understand economics. National policies make no sense to me when they go against every principle of managing money as I know it. I long ago gave up on the stock market—pure chaos. Investors there behave like a large school of small fish that suddenly and all at once dart off in a different direction even though there’s no apparent reason. Too much jumping around for me. But financing and paying bills—that’s another matter.

My introduction to finance came from watching my mother. She was old school. Her reputation and her honor were at stake whenever she owed money. She told me to pay my bills first before I even paid for food. As you can imagine with someone that careful, she planned out her paydays to the penny.

After she died, I had the task of going through her things. She enjoyed reading murder mysteries and must have believed that if she kept the books long enough, many of them with the impress of a mystery readers club, they had to become valuable. I think she had every one she’d ever read. But she’d done more than read them.

“What’s all that?” my son asked as I leafed through the books. Every inch of empty page in the front and back of the books was covered with columns of figures with dates beside them.

“That’s Mum,” I replied. “She was doing her debts.” That’s what she called it too. She had a little column of numbers for every payday with the dates beside each one of when she expected to be “free.”

There was good reason for her to be so analytic. Credit as we know it today was non-existent. Banks could loan money but only if you had a good relationship with them. Stores and co-ops had a sort of lay-away plan. People called that hire-purchase or, more derisively, the never-never. Mum bought me my bicycle this way. She popped in every week and paid a bit toward the down payment (usually 25-50% of the purchase price) then I got the bike and she paid off the rest.

Because she took such pride in paying on time, she expected her efforts to be recognized. She always got a very nice letter from the merchant with an original bill of sale stamped Paid in Full in large, red letters. It was very satisfactory on many fronts. Mum kept those letters with their red stamps as a set of references. Nowadays of course, our only reward is that the billing stops. I think I would go into shock if any of the banks bothered to thank me for paying off my credit cards.

This history is why I am perplexed by the contradictory economic advice that comes pouring at us. Buy, buy, buy says one school of thought: keep the economy going. Save, save, save, says another school—don’t you realize that you are spending too much, don’t have enough savings, and by buying on credit are leaving a legacy of debt to our children?

It reminds me of the contradictory advice rolling at us from the medical profession—or those who purport to speak for it. Remember all the advice about miracle foods and diets that are supposed to lengthen our lives? And how before long research would appear to say that none of it worked and some of it might actually be dangerous? In case you missed all that, consider the latest miracle cure: pomegranate juice. Supposedly this will prevent cancer and promote all sorts of good things. It tastes like camel pee—not that I know what camel pee tastes like. It’s more what I imagine that it might. Latest research now says that all the good stuff in the juice has been lost when it was processed.

The economists say we shouldn’t try to apply the principles of small economics such as family financing to those of larger national economies. But a smokescreen is a smokescreen and while global investment may be the norm, the foreclosures all around us suggest that the very same principles my mother followed still apply. My mother never trusted people with big ideas and promises. She’d shut down fast-talking salespeople promising convoluted investment strategies she didn’t understand. She was very clear on her goal: she wanted that piece of paper with the big red stamp. I know she wouldn’t have drunk any pomegranate juice—thank you very much—no matter who was pushing it.

That sounds very good to me. I think I’ll go and do my debts.